PART 1-PLENARY SESSION THE (SANITIZED)PRIVATE SECTOR SURVEY ON COST CONTROLS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85B01152R001201530001-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 413
• Document Creation Date: December 21, 2016
• Document Release Date: April 2, 2008
• Sequence Number: 1
• Content Type: REPORT

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PART I - PLENARY SESSION
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROLS
Chief Operating Officer
Grace Commission
My objective today is to discuss the President's Private
Sector Survey on Cost Controls (PPSSCC), its objectives,
operations, the current status. I will also share with
you information, indicators and general areas of the Federal
Government -- with specific focus on financial operations --
which I fees need to be improved.
Why PPSSC:C?
First, let me discuss why President Reagan decided to
establish the President's Private Sector Survey on Cost. Controls
(also known as the Grace Commission). Did you know that it has
taken this country 186 years to reach a $350 billion budget and
only six years to double that amount to over $700 billion? If we
look to 1985, we will have tripled that budget in a short period
of nine years. Where and when is the Federal spending going to
come under control?
Let's take ?a look at a few disturbing facts:
-Our national debt today is over $1 trillion. At. the
highest point in the Vietnam War, it was only $437 billion.
In a short ten-year period-, it has doubled.
--The interest alone on the national debt is over $100
billion a year.
--It takes all the taxes collected from individual. taxpayers
in the tax bracket of $29,999 and below (60 percent of. all
taxpayers) to pay just the interest on the national debt.
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--In 1972, expenditures for social programs were $16 billion.
Today, they are in excess of $210 billion, a 1,.300 percent
increase.
-Total transfer payments, such as food stamps, Medicare,
civil service retirement and housing subsidies, not .
including social security payments, equal over 110 percent
of all the taxes paid by individual taxpayers in this
country. What this means is that the Government. is nearly
in a deficit spending pattern before it begins to pay for
maintaining one square foot of the 2.6 billion square feet
of office space it owns or the $60 billion plus in salaries
and expenses.
--Ninety-six percent of all net personal savings in this
country is borrowed by our Federal Government, and this
amount has increased at an alarming rate over the course of
the past ten years.
--On the other hand, the Government today stands behind some
$905 billion of guaranteed and direct loans.
--There is about $ 2 trillion in insurance risk that the
Federal Government has assumed under various insurance
programs it adminsters.
The Need for Financial Information
We, as financial managers, are faced with the challenges of
reversing this trend. These challenges must be met by us, by the
Congress, and by the President and future Presidents if we are to
survive as a nation.
My major concern is what future generations of Americans --
our children and their children -- will face. After looking at
our international and domestic financial situation, it doesn't
take much intelligence to conclude that, if we collectively do not
begin to do something about the spending patterns that exist in
this country today, we are likely to pass on to our children a
standard of living that is clearly more deficient than that which
was passed on to us.
The numbers are there and the trends are obvious. In the
east, it has simply been a case of more, more, and more. Today,
you, as financial managers, can play a. most pivotal part --
indeed, a key role -- in attempting to turn that trend around.
This starts by assuring that you produce the right financial
information, at the right time, in the right place, . and at the
right cost in order to make the right decisions. The information
needed to make good decisions is presently not there. What you
have is a lot of data; but the data you have are not the manage-
ment information or financial management information that is so
vital to proper decisionmaking.
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Let's take a look for a moment at the financial information
that should exist but presently does not. The Government for
example, purchases approximately $130 billion worth of goods and
services each year. The Federal Government does not know the full
extent of how much it spends for consulting services, what kinds
of contracts are awarded, what the average mark-up is, the differ-
ence between quality performance and nonquality performance,-or
whether the service has been previously procured elsewhere in the
Government, etc. The same is true with regard to information
about software costs and types, feeding operations, and normative
information on administrative management services, which senior
managers could use to improve their decisions concerning public
policy and resultant spending. Federal agencies have just
recently begun to capture some of these types of information,
information which is essential to decisionmaking.
Management Systems Need Attention
The Federal Government has over 5,000 procurement data
systems, over 300 accounting systems and over 300 payroll systems;
it seems that each agency has its own. As you know, when you buy
things, you often do not buy the same thing every time. Each
Government organization, however, generally goes through the
same process of issuing a Request for Proposal and subsequently
awarding a contract. We -- you and I -- could probably identify
100 critical information items that are required for procurement
management and decisionmaking. These 100 or so information
requirements could be applied universally across Government,
at the primary level, with some minor variations at the secondary
and tertiary levels. It must be always recognized that, of
course, there are differences between buying pencils and major
weapons acquisition, but, by and large, there is a great deal of
commonality among all procurement systems. For example, some
questions that need.answering are:
--How much does the Government spend, on an annualized basis,
for the procurement of software packages?
--More importantly, what is being procured?
--Do agency purchases of software packages and systems design
services overlap and duplicate?
The Federal Government owns 33 percent of all the land in
this country -- 744 million acres -- yet it does not have adequate
information on royalties collected from those leasing the Federal
land, other revenues collected, nor the fair market values of
other Federal properties.
Along these lines, did you know that the Federal Government
owns 405,000 buildings, in which there is approximately 2.6
billion square feet of space? Again, the Federal Government
does not have the information it needs to manage this total
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space effectively. It should have better information on whether
it should lease or buy office space and whether:
--The space should be maintained and managed by the private
.sector or managed internally; and
--The.expected return on investment justifies the decision to
-buy or lease.
The Grace Commission raised some of these questions early
in the survey. In-many cases, we were told we could get,the
answers to our questions in Washington; in other cases answers
were to be found in San Francisco, or in Minneapolis; and yet
other cases, in rural America. We discovered that the data were
fragmented and scattered throughout the country. Therefore, it
was extremely difficult, if not impossible, to develop. baselines
to make certain assessments and evaluations and upon which to draw
conclusions.
You should recognize that your Federal Government and mine
is heavily into the real estate business ---it owns over 50,000
multi-family or single-family homes that have been repossessed by
the Veteran Administration, the Federal Housing Administration,
and the Farmers Home Administration. Some key questions that we
should ask about these real estate holdings:
--Should the Federal Government be in the real estate
business?
--Should responsible Federal agencies make agreements with
banks so that when repossessions take place, the banks
manage these affairs for a fee?
--How does this fee compare to the Government's cost of doing
business?
Answer to these questions can only come about from the avail-
ability of adequate information.
Another example concerning the need for improved information
relates to the over $1.2 billion of surplus and excess real pro-
perty owned by the Federal Government but valued at acquisition
cost. How can a Federal decisionmaker make an informed decision
as to the Government's financial standing when property acquired a
hundred years ago is reported at its acquisition cost of $100, and
yet, in today's market, could be valued at a billion dollars? An
estimate of the fair market value of this $1.2 billion of property
(acquisition cost) is alleged to be in excess of $25 billion in
today's market.
Finally, the size and complexity of the Federal Government
is exacerbated by its lack of a cohesive, integrated and compre-
hensive management system. Long-range planning in the Federal
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Government does not exist today. In many cases, long-range plan-
ning is this afternoon's press conference or tomorrow morning's
Congressional testimony. Too many decisions concentrate on
short-term; unfortunately, some of these tie into the political
structure and process, while others affect both career civil
servants and political appointees. It is very difficult to manage
without long-range planning; its absence frequently creates.
discontinuity of operations, and .yet that is often exactly.how the
Federal Government operates. For example, one Federal agency that
.is responsible for disbursing over $50 billion annually has had
four agency heads in four years. This is tantamount to the annual.
replacement of a chief executive officer in a private corporation.
The Federal' Government needs to have continuity in top leadership,
as well as in middle management in each of its organizations. The
Grace Commission is addressing some of these continuity issues as
part of the Personnel Management-and Federal' Management Systems
task force.
The "M" in OMB has been missing for some time now. It has
been, at times, only the office of Budget. No one in the recent
past has provided dynamic leadership to the management side of the
Federal enterprise. The current Deputy Director of OMB,'Joseph
Wright, is succeeding in his efforts to change that. Each one of
you has an opportunity to help him in this undertaking. As I
understand it, he will discuss with you this afternoon this Admin-
istration's efforts (Reform '88) to make major management reforms
and improvements in the management of the Federal Government's
business.
The Structure Also Needs Attention
Now, let's address the management structure in the Federal
Government, and let's get to the bottom line quickly. I'm not
aware, for example, of a private sector firm today that has
three separate and.distinct units in its corporate organization
reporting to the Chief Executive officer and dealing separately
with the following three integrated functions:
--Personnel management;
--Computer acquisition and real property management; and
--Budget and financial management.
Three independent organizations (the Office of Personnel Manage-
ment, the General Services Administration and the Office of
Management and Budget) exist in the Federal Government today to
set policy and monitor its execution in these three areas. Each
is independent of the other, and each reports to the President.
In this regard, as I recall, the President has over 60 people
reporting to him. According to management experts like Peter
Drucker, the span of control standard generally calls for some-
where.between 7 and 10 people reporting to an, executive.
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. This structural problem has contributed to the over 300
different accounting and payroll systems in the Federal Government
today, to the lack of an overall financial management strategy,
and to the-absence of integration between financial and property
management systems, etc.
As a further illustration, when I was Assistant Secretary at
.the Department of Agriculture back in the mid-seventies, we were
unable to determine the accurate number of USDA field locations:
We. thought it was around 15,000. I don't know whether they'have
an accurate count today, but it wasn't there back in the seven-
ties. Thi.s complex field structure extends and impacts other
Federal agencies as. well. The Federal Government, for example,
has no point of coordination or accountability dealing with the
establishment and management of its field structure. If there
was, I doubt seriously whether the Federal Government would have
1,750 personnel offices throughout the country, with sometimes
four, five or six in the same city, often situated in the same
building, and providing various personnel and personnel-related
services. Why couldn't one Federal personnel management office
service all Federal agencies at one location in each city?
What does this all have to do with financial information or
financial management? The message I'm trying to convey is that
financial management goes beyond just dealing with financial
information. If you're without an adequate accounting system to
capture required financial data, which can in turn be translated
into financial information, you will never get a marriage between
your budget system on the one side and your accounting systems on
the other, not to mention the difficulty you will encounter with
financial reporting. -None of these areas will tie together unless
you are aware of the happenings in your environment and fully
understand how financial management -- if taken together with
other key managment systems in your organization -- can make a
,difference.
Where We're At
With this backdrop, I'd now like to explain why the President
thought it would be a good idea to bring some private sector
people to look at Federal Government operations. The President,
as you know, led a similar study in California in the 1960's,
when approximately 200 people performed a review of the State
government operations. The results of the-California study were
overwhelmingly positive and impressive. Because of that most
positive experience, coupled with the need to reduce Federal
spending and improve operations, the President decided to seek
advice from the private sector.
In late February 1982, the
Chairman of the Board and Chief
President
Executive
called
Officer
Peter
(CEO)
Grace,
of K.
R.
Grace and Company, (the longest tenured Fortune CEO in America),
to head up a commission to be called the President's Private
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Sector Survey on Cost Control (PPSSCC). During the period, March
through June 1982, Mr. Grace recruited 160 chairmen of the boards
and chief executive officers from all over the country to serve
on the PPSSCC Executive Committee. They, in turn, recruited
about 1,500 full and part-time private sector people, including
presidents, chief operating officers, chief financial officers,
executive vice presidents and others. Many of these volunteers
came from the parent companies headed by members of the Executive
Committee.
Therefore, it can be said that the PPSSCC.is a totally
volunteer operation with no Federal money involved. I am proud
to report today, that with the exception of Janet Colson, who is
.a Special Assistant to the President and the Deputy Director of
PPSSCC's.inanagement office, there have been no Federal.employees
on this survey project. The-private sector responded to the
President's and Mr. Grace's call for assistance by contributing,
during the past year, an estimated $60 million in travel and
personnel costs for the 1,500 volunteers reviewing and evaluating
Federal operations to identify ways in which opertions could be
improved and cost reduced.
PPSSCC objectives were basically two-fold: first, to take
a long hard look at how the Government performs its business
and recommend ways to make it more efficient; and second, to see
if proven private sector methods of management could be applied
effectively in the Federal arena. In so doing, short and long-
term opportunities for improvement were to be reported. During
the past nine plus months,. we've tried to do just that.
We organized the study around 36 task forces; 24 were
organizationally focused; i.e., the Department of Agriculture,
the Department of the Interior, and the Department of Transporta-
tion; and 12 were functionally focused and cut across Government
departments and agencies; i.e., financial management, personnel
management, data processing, and research and development. Each
task force had a minimum of two members of the Executive Committee
serving as co-chairs. In addition, there were as few as 20 people
on one task force, and as many as 82 on another.
One task force stood out in that it focused on the
Federal management system. Many of the needed improvements
we see in Government today are not due to incompetent perform-
ance or to people who do not care or who do not want to work.
Rather, these short-comings are caused by strategy, structure
and systems problems. This task force addressed these key
elements of management.
The process followed by each task force was basically four-
fold. Initially, we asked the task forces to spend 1 or 2 weeks
becoming more learned and knowledgeable about the agency or the
function they were going to be studying. We developed some
critical skills requirements for each task force and matched
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these requirements with available resources. Therefore, we
identified these critical skills and recruited people who- had
demonstrated, for example, personnel and human resource management
skills, and assigned them to work on the Personnel Management Task
Force. We did the same thing with other areas, such as.financial
management, research and development, and data processing. For
Interior, we tried to find people who had experience in natural
resources; for Defense, we tried to find people who had experience
in defense and defense-related industries. Overall managerial
capabilities and experience were sought for all task forces.-
Each task force then spent about 3 weeks surveying the
organization or function under review, studying that organization,
reviewing the size and scope of operations in terms of dollars,
people and field locations. They reviewed budget documents,
GAO audit reports,. Congressional hearing documents, various
study reports and prior findings of the office of the Inspectors
General, etc. Prior to and concurrent with these activities,
the PPSSCC management'office interviewed hundreds of people,
including Assistant Secretaries for Administration, the Director
of the Congressional Budget Office, the Comptroller General,
several key officials at the office of Management and Budget,
private organizations and special interest groups. During these
4 to 5 weeks, we reached out and collected as much information as
possible and synthesized that information into a set of issues
for review or improvement opportunities. The task force then
spent the next 12 to 16 weeks reviewing each of the improvement
opportunities in greater detail. The results of these efforts
were to be included in individual task force reports to be
released during the April through June 1983 time frame. We
are currently engaged in this process. A final report to the
President is planned for late June 1983 or early summer.
This task has not been an easy one; it has been very frus-
trating at times. We've had to deal with court suits and media,
Congressional and public inquiries. Just last week, there was an
article in The Washington Post which many of you, I'm sure, read.
The article alleged that the PPSSCC was recommending the abolish-
ment of the Veterans Administration. The truth to the matter is
that such recommendation was never included in the rough draft or
final versions of the task force reports. These are the kinds
of things that have been very frustrating and have detracted
attention away from the main purpose.
On April 5, we will release for public review, in accordance
with the Federal Advisory Committee Act, the first six task force
reports. They will cover Personnel Management; (a cross-cutting
report); the Department of Agriculture; the Department of Energy;
the Department of Commerce; the Department of Health and Human
Services, (exclusive of the Social Security Administration, Public
Health Service, and Health Care Financial Administration); and the
Environmental Protection Agency, the Small Business Administra-
tion and the Federal Emergency Management Agency.
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Those six task force reports will be deposited in the Reading
Room at the Department of Commerce on the same day. Teri days
later we will hold a public meeting also at the Department of
Commerce, during which these six reports and their specific
recommendations will.be discussed by a Subcommittee of the PPSSCC
Executive Committee. Thereafter, and for the next 3,moriths,.we
will release every 2 weeks six task force reports, through about
June 22 when the last group of reports will be released..
A Time for Change
Now, I'd like to make some general observations on the
subject of financial management. My personal belief is that
financial management will undergo significant, bold changes
during the 1980's, changes the likes of which you've probably
never experienced. You'll need''to be prepared. There will be
four major component parts in this process: strategy, structure,
systems and people.
In my view, you, as financial managers, will not be able to
make significant improvement in the area of financial management
unless you approach it in an integrated, holistic
fix here and a little fix there will not o STAT
i
The first thing that must be established is a financial
management strategy: What is it that this Government needs
and wants to do with regard to improved financial management
(budgeting, accounting, reporting and auditing)? What direction
should it move in? What resources is it prepared to commit?
This requires a strategy at the very top level of Government.
It's not a matter of trying to patch up an accounting, budgeting
or reporting system that works. It's a matter of initially
looking at financial management in a most comprehensive fashion.
.Identifying needs and requirements for improvement and developing
a plan of action to get there, with principal focus on compat-
ability, integration and unification.
The next major component is structure. As you know, the
Department of the Treasury plays an active role in financial
management. More recently, the Office of Management and Budget
has played a more active role in financial management. The
General Accounting Office also has a role in financial management
in that it sets accounting_._.s_tandards and then audits, reviews
and evaluates those s.yst"ems for compliance with established
standards. The General Services Administration also plays a
central role, particularly as it relates to computer and office
systems acquisition needed for automation. Then, there are
individual departments, agencies and bureaus, each doing in many
cases their own thing. Therefore, a whole host of players are
involved. The real question is who's in charge? Who's respon-
sible and accountable for financial management in the Fe( al
Government? F 17
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Do you know, for.example, which agency has the lead role
for cash management today? The. Department of the Treasury has
the responsibility, but it lacks the authority to execute that
responsibility. History has shown that Executive agencies are not
generally concerned with cash flow management -- it's simply not
a high priority item -- since they are not primarily responsible
for cash management and view it as a responsibility of Treasury.
These agencies are concerned with their own programs and opera-
tions -- not Treasury's cash. management concerns. Treasury, for
example, may inform an agency Assistant Secretary that there's a
cash management problem at his/her agency and that the Government
may potentially be losing millions of dollars in interest each
year. However, cash management may not be a high priority item on
the Assistant Secretary's agenda or the "fixing" may take too long
or be too.difficult. So nothing happens. Because there's no real
incentive for the agency to respond -- it's not recorded on their
scorecard -- and because the Treasury is without clout or author-
ity to enforce, the issue remains uncorrected.. . F
Contributing to. this problem is the fact that there is no
chief financial officer today for the Federal Government.. In
a few cabinet-level departments, there have been changes in the
past several years toward a comptrollership or financial officer
function. But most of these comptrollers perform more of a staff
than line function. To my knowledge, there's no chief financial
officer at any agency level that parallels the comptroller or
chief financial officer in the private arena, where financial
policies, practices, methods, controls and standards are estab-
lished and monitored to achieve some reasonable consistency and
compliance at the operating unit level. This condition -- who's
in charge of the "candy store" -- must be corrected if the Federal
Government is to restore fiscal accountability and integrity to
the process.
Structurally, the Inspector General concept is sound and
viable. The Inspectors General meet periodically as part of the
President's Council on Integrity and Efficiency to coordinate and
share information and ideas. But, there's still no day-to-day
leadership to provide consistency of audit and investigative qual-
ity, resource allocation, and integrated training and development
programs. Moreover the full use and exchange of the state-of-the-
art methodologies in statistical sampling, data processing and
flow chart mechanisms are not being realized. This void needs to
be filled and should be considered a key function to be assumed by
the chief financial officer.
The third component is the system. As you no doubt know,
there are some very profound systems problems among (1) planning,
(2) budget development and execution, (3) accounting and financial
management information, and (4) financial reporting. Unless these
four pieces are integrated, or at least coordinated, with audit,
the full value will not be realized.
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People is the fourth component and a very critical one.
There are no uniform specifically defined requirements as to the
skills, knowledges and abilities necessary for "admission" to the
financial community within the Federal Government. I know from
my days with the Federal Government, instances where individuals
trained as procurement specialists who, by virtue of reduction-in-
force, became accountants overnight and were assigned positions
within.the financial community. Suddenly, they were financial
managers or managers of financial information.
The Federal Government needs to define criteria and establish
professional qualfication standards for "admission" and continued
employment in the financial community not only at the civil . "
servant level, but at the highest political appointee level as
well. The political process today accepts an individual who is
politically compatible and appoints him or her, for example,
an assistant secretary for management. In many cases this
individual, while functioning as the chief financial officer
of a cabinet level department, all too frequently does not have
the background, experience or the qualifications to fill that
position. This is also true in the military environment. The
Federal Government and, more specifically, the financial community
need to respond to this case for improved professional standards
in order to attract and retain competent talent in an increasingly
complex. and intellectually demanding profession.
Ten Critical Success Factors for the 80's
Next, I've been requested to repeat for you some of the key
points I made during my keynote address at the Association of
Government Accountants in Denver about nine months ago. I dis-
cussed at that time what I viewed to be the 10 critical success
factors for public financial managers for the 1980's. I have
since received numerous invitations to speak and write on these
critical success factors. Therefore, I thought I'd share them
with you today.
The first success factor is flexibility. Do not misinter-
pret this factor, because I, too, have-an accounting background --
an undergraduate degree in accounting and some graduate work in
accounting and understand and appreciate the need for exactness,
objectivity and independence. Whatever success I enjoy today is
largely attributed to being a "numbers person" and having an
accounting background. However, since our academic training and
day-to-day work experience have often taught us that there is a
right and a wrong, and that there is very little in between, we
tend not to be as flexible as the work environment in the 1980's
will demand from each of us.
I believe it was President Kennedy who said, "We cannot
negotiate with people who say, what's mine is mine and what's
yours is negotiable." All too frequently, individuals in finan-
cial management approach other managers and attempt to sell their
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position or negotiate.on those terms. Achieving a greater level
of flexibility is not only desirable but possible without compro-
mising your objectivity and independence.
The second critical success factor is risk. Frequently, the.,
accountant or financial manager finds it extremely difficult-to
accept anything less than a complete story -- a full set of facts
and figures. Today's operating environment requires a level of
comfort with many numerical estimates and ranges, which frequently
lacks precision and a level of exactness. Understanding the
manager you serve who, at times, will need numbers and information
in a more timely fashion and is willing to sacrifice exactness and
completeness in order to make timely decisions is something that
financial managers will need to recognize, accept and respond to
during the 80's.
Another factor -- the third -- is communication, that is,
the ability-to communicate with nonfinancial managers in laymen's
terms so they understand what you're saying. You, as financial
managers cannot, for example, meet with new political appointees
and talk to them about budget authority, obligations and outlays.
You might have impressed the new appointee with your technical
knowledge, only to become depressed when,you later discover the
appointee's complete lack of understanding about the budget pro-
cess. Instead, your focus should be on communicating in a way
that people will understand. You should speak in nontechnical
terms, if it's results you're interested in.
organizational diversification is the fourth critical
success factor. Most individuals in financial management today
have experienced what I call a vertically integrated career: an
undergraduate degree in business or accounting, a graduate degree,
followed by work as an accountant, auditor, financial officer,
budget analyst, or financial manager. Most seem to stay within
the budget and financial management arena.
Those of you who are determined to succeed in the 1980's will
develop a career plan that will take you outside of financial
management for a "cross-fertilization" experience. Following this
developmental experience, you will return to the financial
management arena better prepared and with a different perspective
on what it's like to sit on the other side of the desk. Since
most financial managers today occupy staff positions, you should
experience what it's like to be a day-to-day line manager, so
you can better understand what managers need and thin nPrform more
The fifth critical success factor is. timeliness. How do
you preclude achieving. a required, rather than desired, level
o exactness at the expense of timeliness? If I need certain
information, a specific analysis, or a report tomorrow to make a
decision, and I do not receive it in a timely fashion, I'm likely
to make that decision --.if time is of the essence -- and run the
STAT
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risk of being wrong, rather than not make the decision at all.
Remember, there are times when some information, however general,.
is better than no information at all. Therefore, it's imperative
that you understand the decisionmaker's requirement.. Financial
managers strive for exactness in reporting information to the
senior level manager when some of the information sought. can be
satisfied by ranges and estimates. Therefore, before proceeding
to do everything as usual, consider the possibility of incurring
risks whenever and wherever appropriate -- challenge yourselves to
assess whether past practices should apply or whether risk taking-
may be more appropriate and effective.
The sixth critical success factor is technological awareness.
We're living in a world of change that will be unprecedented in
the months' and years ahead. Employees will no longer be sitting
in their offices with their calculators cranking out numbers.-
Many of you by 1990 will be working at home aided by a computer
terminal and communicating technology -- doing analyses, making
inquiries and communicating with your fellow co-workers'at home
and at the office.
You need not be a computer expert or technician. However,
you should understand the computer environment, so that you kno
what computers can or cannot do. You cannot afford to sit back
and close your eyes to new technology and refuse to learn new
ways to solve old problems. It really isn't a matter of whether
you're going to learn and adjust to this new world of technology.
The question is when will you begin? The technology is here
today. Better than 51 percent of the total workforce in America
today is employed in offices. One trillion dollars a year is
spent to employ and support white collar employees in private
and public sector offices throughout the country. Most of that
amount, or about 72 percent, is spent to support you and me --
professional employees. Therefore, with this kind of potential
pay off, you can expect a great deal of attention focused on the
office environment and the productivity gain and dollar savings
that can be realized through the introduction of automated equip-
ment in the office -- that's got to have a significant impact
on how you and I will do our work. You will need to know what's
available and what it can or cannot do for you in order to
maximize your abilities and capabilities to deliver the services
you're paid to provide.
The seventh critical success factor is what I call. the
"holistic" approach. Do not become so parochial as to look only
at financial management and ignore other areas. Let's assume fo
a moment that the recent passage of legislation will require
the implementation of a new social program. Program officials
will generally look at financial and cost information only as it
relates, for example, to the food stamp program. They generally
will not take into account other associated costs such as new
personnel, space, relocation, organizational equipment, admin-
istrative and overhead costs. Therefore, it is critical that
STAT
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financial managers know enough about an entire program and look at
the total picture in terms of providing valuable and meaningful
financial management information to program managers. It's easier
and clearly more effective for a financial manager to understand
the total picture -- the program in this case -- than for the
program manager to understand financial management.
Utilization of the best practices is the eighth critical
success factor. This is what I call avoiding the "NIH" syndrome,
the not-invented-here syndrome. This syndrome explains why we
have over 300 different accounting systems, 300 payroll systems,
5,000 procurement data bases, and countless numbers of duplicative
and overlapping software packages and management systems in the
Federal Government. There are thousands upon thousand's of good,
demonstrably successful practices and techniques that are avail-
able from other agencies and are not being used. One example is
the effective process by which the National Finance Center at the
Department of Agriculture processes payment vouchers and payroll
checks. The Center processes some 30,000 vouchers per day at an
approximate cost of less than one dollar per voucher. There are
hundreds of other installations in Government that process the
same type of vouchers for a great deal more, ranging from $2 to
over $8 per voucher and perhaps even more.
The ninth critical success factor is power. The financial
manager of the eighties will have the opportunity -- because of
the information he or she has access to -- to influence, direct
and control. Information is power. If you do not believe me,
take a look at the perpetual survivors in the Federal Govern-
ment -- those who have survived presidential appointment after
presidential appointment for 20 years. Again, let me repeat,
information is power -- it is power at your disposal to be used
judiciously and appropriately.
The last critical success factor is justifying your
existence. With the significant technological changes that
will take place.in the 1980 timeframe, it is important for you
to demonstrate your worth -- that you're making an effective
contribution to your organization. If you do not adjust to
changing times, you are likely to be doomed for extinction
and be replaced by someone who's "with it." It's never too late
to learn, but don't wait too long or it will be an uphill battle.
Summary
You're now aware of what the Grace Commission is doing --
what Joe Wright and Reform '88 are trying to get done -- and we
have a President who's willing to challenge practices of the past
and implement change for the good of the American people..
The question before you is whether you will join in to.
help restructure and improve financial management in the public
sector or let this opportunity pass you by. Will you let that
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opportunity take place or will you make it happen? The difference
between making it happen and letting it happen is the difference
between failing and succeeding, between being a winner or a loser.
The loser is the person that lets things happen. The winner is
the person that makes things happen. As Robert Kennedy once said,
"Though these are difficult and. perplexing times, so too are they
filled with opportunities and challenges." Those opportunities
are before you. Will you join in and help Joe Wright and this
Administration with the Reform '88 initiatives and make the .
changes required? Will you join in and assist in implementing,
recommendations made by the Grace Commission to control and
reduce costs?
One of the most vital professions in this day and age is
financial management -- in large measure, it holds the key to the
future solvency of our Government. Financial managers will have
an opportunity for significant input in this process of change if
they want to become involved and participate. Public financial
management as we know it today will not be recognized by 1990.
We -- you and I -- cannot be satisfied with the present -- the
status quo --.or we are destined to fail. We must leap and grab.
that opportunity for change and become a part and play a role in
carving out our future financial management environment.
In closing, I would suggest that if you elect not to become
involved, the risk that you are taking is to be supervised by
people less competent than you. Let me repeat, if you do not
become involved and make things happen then you will let. them
happen and run the risk of having someone less competent than
you as your leader. I look foward to your assisting us in the
implementation of the recommendations of the President's Private
Sector Survey on Cost Controls.
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JOSEPH WRIGHT, J R.
Deputy Director
Office of Management and Budget
Good afternoon.' it is indeed a pleasure to participate in
the l2th.annual -JFMIP conference. Today I want to talk to you
about some of. the major problems that exist in the management of
this Federal bureaucracy and some initiatives being taken by this
Administration in dealing with. those problems.
In Administration after Administration, dedicated people
come to Washington, filled with good intentions about improving
Government. In their effort to accomplish a great deal in a short
time, they have often ended up expanding programs and increasing
the size of Government. This has resulted in more people in
Government and ever-increasing Federal budgets. Administrative
management practices have not kept pace, leaving the door open
for waste, abuse and even fraud. This is not surprising when
you consider the size-and complexity of programs we arerasked to
manage. In this Administration, we are. committed to changing
this direction by introducing better management processes.
We manage more than 2,000 programs, which run the gamut from
natural gas prices to savings bonds. These programs reflect
tremendous growth and change in constituencies during the past
20 years. The workforce resides in 13 cabinet departments and a
multitude of independent agencies. We have seen the demise of
only one -- the Community Services. Administration -- and four new
cabinet departments have been given birth since 1965.
To illustrate the enormous growth in Government programs,
note the budgets of two of the major departments in 1960 compared
to 1982. In 1960, the Health, Education and Welfare budget was
$26.8 billion and the Department of Defense (DOD) budget was $23.9
billion. In 1982, the Health and Human Services budget was $251.7
billion and the DOD budget was $182.9 billion. This is astounding
growth. I think you will note that the social programs have grown
considerably faster than the defense programs.
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Government has increasingly assumed responsibility for
feeding those in need. Uncle Sam provides 95 million meals a
day at an annual cost of $17.8 billion. Thirteen years ago these
programs cost $960 million. The food stamp program, which began
in the early 60's, has grown to where it serves over 21 million
people.
The number of veteran's programs has increased. The
complexity index has zoomed. The Veteran's Pension Program alone
has three layers to be maintained concurrently, each mandated by
the Congress: the pre-1961 system; the 1969-78 system; and
the post-1978 system. Each has its own rules, benefits and
administrative requirements. To complicate matters, a whole
new constituency appeared in the post-Vietnam era -- a sensitive
period that required new rules?and.processes.
. Much of the growth in size and complexity occurred when
new program areas were thrown into existing cabinet agencies,,
straining the administrative and management systems to a point
of inefficiency from which they have never fully recovered. For
example, the Department of Transportation alone administers almost
100 highway programs today, compared to 14 in 1963. The number
of highway requirements increased from 15 to 53 during that same
period, each requiring a separate tracking system.
The point of all of these examples is that Government's
mission -- translated into programs -- is bursting the seams. of
the administrative systems serving those programs. The problem
can no longer be ignored, nor patched with a lick and a promise.
The administrative costs of executive branch agencies will
total about $138 billion in 1983, including personnel costs
-- about 17 percent of the whole Federal budget. If we could
assume that through improved processes, systems, and management
practices, we could reduce these administration costs by 10
percent, think of the payoff. That savings of $14 billion could
reduce the projected budget deficit for fiscal year 1984 by nearly
10 percent, and if done properly, would not adversely affect the
delivery of Federal programs. In fact, improved systems should
enhance program delivery.
The size of the Federal Government and Government-financed
work force is enormous. It is the largest employer in the country
with 2.8 million civilian workers supplemented by 3 million con-
tract employees and another 5 million State and local employees
administering Federal funds.
A good portion of civilian and contract employees are housed
in 405,000 Government-owned office and other buildings, and in
thousands of leased buildings -- a total of 3 billion square
feet of space to be cleaned, maintained and kept secure. Forty-
thousand people are employed for these purposes alone. .
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To implement the, many programs, Government employees are
required to travel.- Imagine the record-keeping involved in $5
billion worth of tickets and related travel expenses for thou-
sands of employees each year. Outdated, redundant regulations
have added to the burden, and a lack of good travel management
processes has increased the cost to the taxpayer.
There are 332 identified accounting systems in the Federal
Government. Only 63 percent meet the standards of the General
Accounting Office,-and most are not functioning optimally.-
This,, of course, leads to the subject of computers,. Accord-
ing to our best records, the Government employs 150,000 people
to run its 16,000 overworked computers at a cost of $6 billion,
annually. The average age of this equipment is more than six
years old. Considering that the older the computer, the more
space, maintenance, labor and energy consumed, there is a great
potential for Ravi nag in nr l r i-i n i many of +-ha (-ncrornmonf-
computers.
An inventory of existing management systems in all major
agencies identified over 600 major management and administrative
systems in four basic areas -- personnel, property, dollars,
and information. Most of them are incompatible, even within
individual agencies. So, what. are we going to do about these
problems? .
When President Reagan came to Washington, he proi-lised
the American people a more responsive, more economical, more
efficient, and less wasteful form of Government. He asked us
to search out the problems, many of which I have just outlined,
and then to do something about them. By last summer, we had
made some progress, but the President believed. strongly that
our efforts required broadening with more direction. Thus,
the idea for Reform '88 was born. The formation of Reform '88
was announced in September 1982. Reform '88 highlights this
Administration's commitment to large scale reform of the Federal
Government's management processes over the next six years.
We recognized that the goal of permanent, structural systems
improvement would require strong and continuing White House and
agency commitment in implementing effective administrative systems
for Government-wide use. Therefore, last September, the President
established a new Cabinet Council on Management and Administration
(CCMA). The CCMA is chaired by President Reagan with Ed Meese as
the Chairman Pro Tempore. The committee is made up of a. select
group of departmental cabinet officers. So, you can see, the
entire effort has the attention of the highest levels of Govern-
ment.
One of the first issues addressed by Reform '88 was the
antiquated communications system between the White House and major
Government. agencies. We were using cars and drivers shuttling
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back and forth with memos and agendas with red stickers "URGENT."
Security officials were going bankers! That was the same way when
Madison was in the White House.. That finally ended,. and the first
electronic mail system linking the White House and the cabinet
departments is already in operation and will be expanded._
Secondly, we are tracking a series of management improvement
initiatives which will result in savings of $20-30 billion over
the next three years. The third major accomplishment involved OMB
getting its house in order. Steps have been taken toward reducing
central management regulations directed to the agencies. A review
of OMB regulations by the Assistant Secretaries for Management and
OMB itself will result in reductions in OMB management regulations
of between 20 and 30 percent, and that is still growing..
The guts of Reform '88, however, are the institutional
improvements that will be made over the next several years --
improvements that will survive changes in political leadership
and turnover in career personnel. The improvements which
have been identified fall into four broad areas: the budget.
process, financial management systems, resource management,
and a management information system that ties them all together.
The cornerstone. of financial management in the Federal
Government is the budget process. Our objective is not to tamper
with the content or organization of that process, but to expand
the.application of ADP technology to the various systems that
drive the process -- from budget formulation through preparation
and submission to the Congress and, finally, appropriation
actions. Our goal is to reduce the clerical drudgery and.pro-
cessing burdens associated with the budget process and to enhance
the timeliness and reliability of the data. Existing technology
can be used to improve this process. Eighteen of one hundred and
one agencies are now transmitting budget data in machine-.readable
form.
Our goal is for 22 major agencies to have fully-automated
systems for use in transmitting numeric data for their fiscal
1985 budget submissions. The remaining 79 agencies will be tied
in as rapidly as possible. The result will be a faster and more
accurate exchange between agencies and OMB budget examiners, and
enhanced analytical capabilities.
Timely, accurate financial data are essential to improving
overall management in the Federal establishment. One of the
first steps toward achieving that objective is for each agency
to have an adequate, GAO-approved accounting system that meets
management's needs and is compatible for Government-wide inter-
face. In spite of sporadic efforts by most agencies over the past
30 years, less than two-thirds of all Federal accounting systems
have gained GAO approval. Even less are operating these systems
as described. A major initiative is required to ensure that
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Government builds responsive accounting systems. Reform '88
will take an active role in requiring agencies to enhance their
systems.
Valid verifiable accounting data are only the first: step .
in the improvement effort. Data are not information until they
are intelligently used. Managers must establish processes in
which they can use data effectively to manage and control their
financial operations. In response to this need and as a corollary
to the accounting project, OMB will be working with GAO to develop
standards and guidelines which will serve as a basis for financial
management within departments and agencies. These standards, when
applied Government-wide, will be flexible enough to accomodate the
unique needs of individual departments and agencies, but will also
serve as the basis for ultimately developing uniform accounting
information across Government.
Better financial data are the cornerstone to improving
overall management in every Federal entity. Most agencies and
major operating components have developed their own decentralized,
nonstandard systems with independent data bases to support unique
management needs. It is very difficult to obtain department-
wide data, much less Government-wide data, other than through
cumbersome processes with a high probability of inaccuracy.
There is no way to collect these data in a timely manner.
The Department of Commerce has a project underway which has
the potential to be used as a model for building common financial
information repositories across Government. Commerce is taking
data from existing accounting systems and putting them into a
standardized, accessible, and controlled repository, using a
"bridge" program concept.
While the details of the Government-wide approach are being
shaped, we are optimistic that a common financial reporting
capability for all departments can be in place by December 31,
1984. This will be a major milestone in the effort to build
responsive reporting capabilities in Government..
Both debt and credit management offer opportunities for
enormous savings to Government through improved management and
systems. Gross debt grew from $77.6 billion in 1974 to $273.2
billion in 1982. About 80 percent of the total debt is loans to
students, homeowners, businesses and farmers. About $27.3 billion
is delinquent income taxes. Overpayments under Federal entitle-ment and assistance programs account for another $3 billion.
Delinquencies and write-offs are rising at a rapid rate.
Our delinquency rate was 41 percent the past year, compared to 8
percent for national banks. Our write-offs are 66 percent higher
than national banks. The deteriorating trend must be reversed.
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Agencies have been directed to strengthen their adminis-
tration in this area. This will be accomplished by upgrading
management information systems, by making collection systems less
labor and paper-intensive, by using higher quality servicing and
collection methods, and by setting goals to reduce delinquencies.
We will move quickly to implement the Debt Collection Act of. 1982,
which makes available to agencies collection tools previously
denied by law. We intend to automate servicing and collection
functions, dispose of portions of agencies' loan portfolios, and
use up-front risk analysis and credit scoring procedures.--
There are also great opportunities for improvements in the
cash management area. An almost unimaginable $1.7 trillion per
year passes through Government systems. The Government pays 5
million civilian and military personnel and processes 640 million
checks, annually. The Federal Government does not manage tax-
payers' money well. This must be changed. There is a cash flow
of almost $7 billion each business day. This makes effective
cash management a tremendous concern and priority. Inefficient
practices cost the taxpayers millions of dollars"each year in
unnecessary interest costs.
The potential for savings is great. For example, accelerat-
ing the collection and deposit of funds by only one day would
result in $269 million in interest savings per year. Improving
the timing and control over disbursements by only one day would
result in $312 million in interest savings each year. Although
not all of this cash flow is subject to changes in processing
time, some portions of it can be accelerated by many days or
weeks.
By the end of this year, we expect the agencies to have cash
management systems which will rival those of the private sector.
They will insure that: (1) incoming funds will be collected by
wire transfer and lockbox systems; (2) all collections will be
processed and deposited to the Treasury on the same day received;
(3) payments to vendors and contractors will be made exactly on
the date due -- not before and not after; (4) progress payments
and advance financing under larger Government contracts will be
more selective and controlled; and (5) disbursements to grantees
will be more closely monitored and controlled.
Many of these actions can be achieved through administrative
improvements. Some of the improvements we seek may require
changes of law. We do now and will continue to work closely with
the Congress where it is appropriate in achieving these goals.
The House Government Operations Committee and the Senate Committee
on Governmental Affairs have had a major impact toward better
management with. their leadership in the enactment of the Brooks
Act and the Paperwork Reduction Act. So we share a common goal
with the Congress of a better Government for our constituents.
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In summary, our vision, and part of the legacy this
Administration will. leave the American people, is a Federal
Government operating in a businesslike manner. This means
nothing less than a Government, that provides essential. public
services of high quality as efficiently as possible.
The group in this room has more to do with the success-of
this project than anyone else in the Federal Government. This
will be a grinding, tough project, but it can be done. We have
success in two departments: Agriculture and Commerce. When we
are finished, it will have been the largest and most extensive
management. improvement project that has ever been-undertaken.
We need your help to achieve our Reform '88 goals.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
CONTACTS:
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
CHARGING FOR GOVERNMENT PUBLICATIONS COULD
HELP RAISE NEARLY $265 MILLION
WASHINGTON, June 30--Establishing user fees for
Executive Branch publications can help the government raise
nearly $265 million over three years and, combined with
improvement in management of publications and mailing lists, the
total could increase to more than $1.7 billion, according to a
report released by the President's Private Sector Survey on Cost
Control in the Federal Government (PPSSCC).
These recommendations will be considered on July 13th by
a Subcommittee of the Survey's Executive Committee chaired by J.
Peter Grace, chairman of W. R. Grace & Co., for possible
submission to the President.
The committee studying Publishing, Printing,
Reproduction and Audiovisual Activities found that agencies pay
most of their publication costs from program funds, with little
opportunity for cost savings, noting that Congress often requires
Executive agencies to disseminate information about their
programs, regulations and research. Most of this information is
distributed free of charge.
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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Citing many problems associated with not being..
authorized to sell government publications--including the
unrecovered costs of $1.3 billion--the committee recommends that
agencies have the authority to set user fees for their
publications. Prices would be mutually agreed upon by the
issuing agency and the distributing agency, and would be set no
lower than necessary to recover the costs of handling, mailing
and postage.
By way of example of the need for mailing list
management, the report noted that 29 copies of the same
publication were regularly being mailed to a single addressee.
It also mentioned a major project undertaken in 1980 by the Human
Development Services (HDS) division of the Department of Health
and Human Services to correct its numerous mailing lists. The
end result was the consolidation of 128 separate mailing lists
containing 90,000 addresses, into a single list with 29,000 names
after eliminating duplications, deceased persons, erroneous
listings, and persons not interested in receiving HDS
publications. There is evidence that mailing-list problems
similar to this exist in other Executive agencies.
The success of this project has led the committee to
recommend that the Office of Management and Budget (OMB) should
issue a directive requiring Federal agencies to submit plans for
updating and consolidating mailing lists, together with projected
savings.
(more)
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Federal postage expenditures were also examined by the
committee and although exact costs are not known, expenditures
are estimated to be more than double the $900 million estimated
in 1982 for direct mail charges alone. The report found that
many agencies follow uneconomical mail management practices and
suggested that the Office of Management and Budget issue a
directive to all agencies to evaluate their mail operations, for
purposes of identifying and eliminating practices resulting in
excessive postage and other mailing costs.
Additionally, the report cited "significant room for
improvement" in the management and operation of Executive Branch
in-house printing and improved utilization of the use of private
sector resources.
"Of the three-year total of $1.7 billion in savings and
revenue generation, $1.1 billion are fully substantiated by
adequate documentation, and another $596 billion are partially
substantiated," Mr. Grace said.
Mr. Grace cautioned that in all of the PPSSCC work,
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
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MEDIA SUMMARY
REPORT ON SELECTED ISSUES
PUBLISHING, PRINTING, REPRODUCTION AND
AUDIOVISUAL ACTIVITIES
Media Contact:
THE REPORT RECOMMENDATIONS -- A PERSPECTIVE
To promote a realistic expectation of recommendations
reported, we have evaluated the supportability of the recom-
mendations on their management merits according to the three
categories which follow:
Category I -- Fully Substantiated and Defensible.
Recommendations in this category
are well-supported, convincing and
deserving of prompt implementation.
Category II -- Substantially Documented and Sup-
portable. Recommendations in this
category may not be fully detailed
or documented, but all indications
point to the desirability and
defensibility of proceeding with
their implementation.
Category III-- Potentially Justifiable and Sup-
portable. Recommendations in this
category, while meritorious, are
not fully supported due to time
constraints, personnel resources,
or other reasons, but are deemed
worthy of further analysis to
determine the full extent of their
feasibility for implementation.
1850 K Street, N.W. ? Suite 11SO ? Washington, D.C. 20006
[phone]
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This analysis permits summary estimates of savings by
category, as shown in the table on the following page.
Category/Three-Year Savings
($ millions)
=Recommendation I II III
PPAV 1-1 through 1-5: Improve
agencies' management of their
publications programs. $331.0 (>)
PPAV 2-1 through 2-4: Enable
agencies to set user fees
for their publications. 264.8 (R)
PPAV 3-1 through 3-4: Improve
agencies' management of mailing
lists used to distribute
publications.
PPAV 4-1 through 4-4: Improve
efficiency of agencies' handling
of publications for mailing and
use of LISPS services.
PPAV 5-1 through 5-6: Improve
agency printing production and
increase commercial procurement
of printing services.
PPAV 6-1 through 6-4: Improve
the management of copying and
duplicating resources.
PPAV 7-1: Institute audiovisual
review process.
Total Savings (S)
Total Revenues (R)
Total Savings/Revenues
95.9 (S)
550.0* (S)
158.9 (S)
327.7 (S)
$1,132.5
331.0 (S)
264.8 (R)
$1,132.5
595.8
* Represents minimum estimated revenues or savings
realizable by implementing this recommendation. Actual
revenues or savings would probably be much greater.
** Potential savings are reduced by $8 million in the
event that PPAV 3-1 through 3-4 recommendations are
implemented prior to PPAV 4-1 through 4-4.
*** No savings quantified.
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B
C~dilyl'?'a'L~~t.'T.''?~~
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
PANEL PROPOSES SAVINGS RECOMMENDATIONS OF $635 MILLION
IN FEDERAL LAND MANAGE1'-1E~dT POLICIES
WASHINGTON, May 16--The Federal Government can save
more than $635 million over a three-year period by improving
its management of its land, facilities, and personal property
according to a task force report released today by the
President's Private Sector Survey on Cost Control in the
Federal Government (PPSSCC).
These recommendations will be considered on May 26th
by a Subcommittee of the Executive Committee chaired by
J. Peter Grace, chairman of W. R. Grace & Co., for possible
submission to the President.
The Land/Facilities/Personal Property Task Force was
co-chaired by John F. McGillicuddy, chairman and chief
executive officer of Manufacturers Hanover Trust Company of
New York; Donald G. McNeely, chairman of Space Center, Inc. of
St. Paul, Minnesota; Donald W. Nyrop of Edina, Minnesota;
Joseph J. Pinola, chairman and chief executive officer of First
Interstate Bancorp of Los Angeles and Darwin E. Smith, chairman
and chief executive officer of Kimberly-Clark of Neenah,
Wisconsin.
(more)
185Q K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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The task force studied the offshore minerals
management, Federal vehicle fleet management, and Federal
Records management.
Most importantly, the main recommendation of the task
force was endorsement of the Interior Department's
revenue-producing program of optimizing lease royalty rates
from offshore minerals on the Outer Continental Shelf (OCS).
Citing adequate safeguards in the law and the
Interior Department's five-year plan to produce revenue from
the outer continental shelf, the report endorsed Interior's
five-year plan and recommends two lease provision changes which
could increase Federal revenues without a loss of private
sector incentive.
The PPSSCC task force also recommends that the
Minerals Management Service be structured as an independent
agency within the Interior Department for review every five
years as opposed to annually in order to achieve long-range
goals in the OCS program.
With regard to the more than 300,000 Federal vehicles
(excluding the U.S. Postal Service) operated by the Federal
Government, the task force recommends that the more than 100
agencies/bureaus each operating a motor pool implement some
immediate cost-savings changes. It also recommends creating an
interagency committee at the the Assistant Secretary level to
report short-term savings to the President. The longer-term
(more)
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issue of the extent to which the Government should own and
operate motor vehicle should be addressed by the Cabinet
Council on Management and Administration.
Blaming the Federal Government for keeping too many
records too long, the report recommends obtaining the services
and guidance of the National Archives and Records Service to
establish an effective records management program and to
establish retention schedules.
"Of the three-year total of $635 million in savings,
$152 million are fully substantiated by adequate documentation,
and another $483 million are partially substantiated," Mr.
Grace said.
Mr. Grace cautioned that in all of the PPSSCC work,
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT ON LAND/FACILITIES/PERSONAL PROPERTY
Media Contacts:
Paul Jones
Kimberly-Clark Corporation
[phone]
Murray Sanders/Chris
Tofalli
The President's Private
Sector Survey on Cost
Control
[phone]
Land/Facilities/Personal :Property
Task Force Co-Chairs
John F. McGillicuddy
Chairman and Chief Executive Officer
Manufacturers Hanover Trust Company
Darwin Smith
Chairman and Chief Executive Officer
Kimberly-Clark Corporation
Donald G. McNeely
Chairman
Space Center, Inc.
Donald W. Nyrop
Edina, Minnesota
Joseph J. Pinola
Chairman & CEO
First Interstate Bancorp
Project Manager
Paul Jones
Kimberly-Clark Corporation
The recommendations contained in this report will
result, if implemented, in real and significant savings and
benefits. In light of time constraints, limited resources,
and other pressures inherent in a study of this kind, we
have evaluated each recommendation in order to promote a
realistic perspective on each.
Each recommendation has been identified as falling
within one of the following three categories:
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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o Category I -- Fully substantiated and defen-
sible. Recommendations in this
category are, in the opinion of
the Task Force, convincing and
deserving of prompt implementa-
tion.
4
o Category II -- Substantially documented and
supportable. Recommendations in
this category may not be fully
rationalized or documented in the
report, but all indications point
to the desirability and defensi-
bility of proceeding with their
implementation.
o Category III -- Potentially justifiable and sup-
portable. Recommendations in this
category, while meritorious, are
not regarded as fully supported in
the Report (due to limited time
and personnel resources, and other
constraints) but are deemed worthy
of further analysis to determine
the full extent of their merit for
implementation.
These category descriptors do not take into account
political, social, or economic conditions which may alter
the supportability of these recommendations for implementa-
tion. By categorizing the recommendations, however, it is
possible to assess more effectively the expected estimated
savings as being firm, probable, or potential.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
(202) 466-5170
PRIVATE SECTOR PURCHASE OF A FIFTH SPACE SHUTTLE IS
RECOMMENDED BY PRESIDENTIAL COMMISSION
WASHINGTON, June 30--The President's Private Sector
Survey on Cost Control in the Federal Government today
called for legislation to allow the private sector to
purchase and operate a fifth space shuttle, as well as
allowing the option to purchase future additional shuttles.
According to the report, accepting private sector investors
in the fifth shuttle would allow the Government to avoid
costs of $460 million for each of five years.
These recommendations will be considered on July 13th
by a Subcommittee of the Survey's Executive Committee
chaired by J. Peter Grace, chairman of W.R. Grace & Co., for
possible submission to the President.
The Privatization task force was co-chaired by Bruce J.
Heim, vice president of F. Eberstadt & Co., Inc. of New
York; Paul F. Hellmuth, former managing partner of Hale and
Dorr attorneys at law of Boston; Edward L. Hutton, president
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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2t-
and chief executive officer of Chemed Corp. of Cincinnati;
Paul E. Manheim, of Lehman Brothers, Kuhn, Loeb, Inc. of New
York; Eben W. Pyne, former senior vice president of Citibank
of New York; and David L. Yunich, former vice chairman of
R.H. Macy & Co. of New York.
Stressing the need to increase the Government's effi-
ciency by better utilizing its scarce resources, fulfilling
its responsibilities at a cost savings, and putting the
private sector to work for the U.S. taxpayer, the report on
"privatization" calls for the Federal Government to turn
over a series of activities to the private sector, including
those associated with the space shuttle, Power Marketing
Administrations, construction of Veteran's Administrations
hospitals, the operation of Dulles & National airports, and
military commissaries.
Calling space industry the next major advanced techno-
logical business frontier for the world and emphasizing the
need to develop a space transportation system, the report
recommends that the President and Congress work together to
develop and enact legislation allowing private sector parti-
cipation in the space program, including initiation of
Government/industry cooperation agreements offering incen-
tives to the private sector to make such investments.
In addition to privatizating the shuttle, the report
calls for the Government to terminate its $13.3 billion
commercial involvement in electric power marketing, citing
(more)
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$100 million annual deficits for each of the Government's
five Power Marketing Administrations (PMAs). According to
the report, the best way to terminate the Government's
involvement would be for it to divest its interests in power
generating and transmitting to those private sectors of the
economy better suited and more normally involved in such
activities. Specific recommendations call for the esta-
blishment of a system of user fees to be paid by electric
consumers and the construction of all future hydroelectric
power developments with non-federal funds.
With respect to Federal involvement in airport manage-
ment, the report recommends that the federal Government: sell
Dulles and National Airports, the only commercial airports
in the nation owned by the Federal Government. Noting that
the Federal Aviation Administration may find its role as a
supplier of airport services "incompatible" with its larger
federal role of "ensuring air safety and efficiency," the
report estimates that one time revenue to the U.S. Govern-
ment from the sale of the two airports would be $341.5
million.
The report also finds that military commissaries no
longer fulfill their original mission established in the
1800s of ensuring that supplies were available to frontier
posts. Instead, they have duplicated the services delivered
by private sector supermarkets and placed the Federal
Government in the business of competing with private sector
businesses.
(more)
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The task force concluded that commissaries are compar-
able to warehouse grocery stores and that, cost savings on
products purchased at commercial warehouses are virtually
the same as those enjoyed at commissaries. Substitution of
private sector warehouse food stores for commissary stores
could even allow greater customer convenience and savings
because house brands would be offered.
if commissary operations were privatized and turned
over to commercial warehouses, the report projects one time
revenue of $240 million, annual recurring revenue of $36
million, and annual cost savings to the Federal Government
of $597.2 million.
"Of the three-year total of S2R.3 billion in savings
and revenue generation, $24.6 billion are fully substan-
tiated by adequate documentation, and other $3.7 billion are
partially substantiated," Mr. Grace said.
Mr. Grace cautioned that in all of the PPSSCC work,
estimated savings are more of a "planning" quality and not
of a precise "budget" quality.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT ON PRIVATIZATION
Media Contacts:
Paul F. Hellmuth
Cambridge, Massachusetts
[phone]
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
Privatization Task Force Co-Chairs
David L. Yunich
Consultant and Corporate Director
W. R. Grace & Co.
Paul F. Hellmuth
Cambridge, Massachusetts
Edward L. Hutton
President & CEO
CHEMED Corp.
Paul E. Manheim
Lehman Brothers, Kuhn, Loeb, Inc.
Bruce Heim
Vice President
F. Eberstadt & Co., Inc.
Eben Pyne
W. R. Grace & Co.
Project Manager
Paul Taft
Leo Kramer Associates
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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THE REPORT RECOMMENDATIONS -- A PERSPECTIVE
As the product of an unprecedented and wide-ranging
survey performed in a political atmosphere by p
executives and specialists, the recommendations in this Task
Force report must be placed in perspective. Our volunteer
staff had the formidable task of bringing their expertise to
bear on complex Federal operations in the short span of a
few months while holding down other full or part-time
employment.
Despite these challenges -- most of which were antici-
pated at the outset -- valuable analysis and issue develop-
ment were achieved. The recommendations contained in this
report will result, if implemented, in real and significant
savings and other benefits to American taxpayers whose hard
work and personal sacrifices financially support these
Federal programs and operations.
We believe that the majority of our recommendations
are fully substantiated. However, it would be misleading
to allege that each and every recommendation is rooted in a
uniformly high level of research, analysis and substantia-
tion. Various time limitations, business resources, and
other constraints did not permit achievement of the desired
uniformity objective.
We have evaluated, therefore, the "supportability" of
the recommendations on their management merits and have
grouped them into the following three categories.
o Category I -- Fully substantiated and defensible.
Recommendations in this category are,
in the opinion of the Task Force,
convincing and deserving of prompt
implementation.
o Category II -- Substantially documented and support-
able. Recommendations in this cate
gory may not be fully rationalized or
documented in the report, but all
indications point to the desirability
and defensibility of proceeding with
their implementation.
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o Category III -- Potentially justifiable and support-
able. Recommendations in this cate-
gory, while meritorious, are not
regarded as fully supported.-in the
report, due to time, personnel
resources, and other constraints, but
are deemed worthy of further analysis
to determine the full extent of their
merit.
These category descriptions do not take into account
political, social or economic conditions which may alter the
supportability of these recommendations for implementation.
Accordingly, it is possible, by grouping the recommendations
along the above categories, to assess more effectively the
cost savings that can be expected. This analysis permits
summary estimates of firm, probable and potential savings.
The Report Recommendations -- An Assessment
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in
the matrix on the following page.
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PRIVATE 1: Initiate
a Government-wide
ongoing privatiza-
tion structure.
PRIVATE
2:
Sell all
or part
of
the gen-
erating
and
trans-
mitting
assets
utilized
by PMA.
PRIVATE 3: Expand
NSTS legislation to
allow the private
sector to invest in
a fifth and future
space shuttles and
expendable launch
vehicle systems.
$1,522.6 (A)2,/
PRIVATE 4: Phase
out construction of 917.0 (S) 446.0 (S)
VA hospitals.
PRIVATE 5: Survey
DOD commissaries in
the Continental
United States to 2,064.0 (S)
facilitate 383.2 (R)
privatization.
PRIVATE 6: Sell
metropolitan
Washington's two
Federally-owned 113.2 (S)
airports. 341.5 (R)
PRIVATE 7: Improve
Federal motor vehicle 200.0 (R)
fleet utilization. 1,237.3 (S)
Three-Year Savings/Revenue Opportunities
-~$ millions)-
Category I Category II Category III
1/
$ 3,535.0 (S)
16,301.5 (R)
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Recommendation
Category I
PRIVATE 8: Use
various private
sector services
to reduce Coast
}Guard costs.
PRIVATE 9: Use
private sector. ADP
services to update'
SSA operations.
1/
Total savings by
category (S)
$ 7,753.3
Total revenue by
category (R)
$16,884.7
Total cost
avoidances by
category (A) 0
Grand totals $24,638.0
Category II
Category III
$1,258.1 (S)
$1,817.3
$ 341.5
$1,522.6
0
$3,681.4
0
1/. No dollar savings or revenue enhancement is estimated.
2/ This amount represents future cost avoidances that
would allow redeployment of assets but.are not specific
budget savings at this time.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
Jack Babson
Ingersoll-Rand Company
202-223-6780
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
VETERANS ADMINISTRATION CAN SAVE MORE. THAN $3 BILLION
OVER THREE YEARS ACCORDING TO BUSINESS PANEL RECOMMENDATIONS
WASHINGTON, May 6--The Veterans Administration can
achieve cost savings and revenue generation of $3.1 billion
over a three-year period according to a Task Force report
released on the VA today by the President's Private Sector
Survey on Cost Control in the Federal Government (PPSSCC). The
report also outlined a potential $208 million that can be M
obtained over the same three-year period by better debt
collection.
These recommendations will be considered on May 17th
by a Subcommittee of the Executive Committee chaired by
J. Peter Grace, chairman of W. R. Grace & Co., for possible
submission to the President.
The PPSSCC Veterans Administration Task Force was
co-chaired by William C. Douce, president and chief executive
officer of Phillips Petroleum Co. of Bartlesville, Oklahoma;
Hans W. Wanders, chairman and chief operating officer of The
(more)
1850 K Street, N.W. ? Suite 1150 a Washington, D.C. 20006
[phone]
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Wachovia Corporation of Winston-Salem, North Carolina; and
William L. Wearly, chairman of the Executive Committee'of
Ingersoll Rand Company of Woodcliff Lake, New Jersey.
In discussing this report, Mr. Grace mentioned the
issue about misinformation leaked concerning the elimination of
the VA. He said: "The Veterans Administration Report does not
contain any such recommendations, nor did we ever contemplate
any such recommendation."
The VA Task Force report specifically recommended
savings to the agency by improving the processing of disability
claims and revising the mortgage guaranty operations. An
overall lack of effective utilization of existing personnel
resources was also outlined in the report.
The report proposes that work standards be developed
in accordance with private-sector standards and that they be
used as the basis for budgeting and control of field station
operations. The report notes that standards used in the system
are less rigorous than those that would be applied in the
private sector.
Also, because the VA's current payment system does not
contain adequate controls to identify and correct total
erroneous payments (the VA itself identifies more than $500
million per year in overpayments), the report also proposes
initiating a systematic effort to identify errors in the claims
processing system and to correct the causes of these errors.
(more)
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With regard to improving the management practices at
the VA, the report recommends revising the current debt
collection procedures so they incorporate proven private sector
practices, including credit bureau reporting and telephone
communications.
Specific recommendations for improving mortgage
guaranty operations include halting the practice of acquiring
homes at foreclosure sales unless there is clear evidence that
such action is required to avoid major disruptions in the
market for VA mortages. The report noted that the VA loses
nearly $7,000 per home for each mortgage default because of
sales commissions and property management expenses.
The Task Force also proposes instituting a program to
sell mortgages held by the VA in order to remove it from the
risks of the financial markets, as opposed to the present
practice of holding on to the mortgage for an undetermined
period.
"Of the three-year total of $3.1 billion in savings
and revenue enhancements, $2.8 billion is fully substantiated
by adequate documentation, and another $225 million is
partially substantiated," Mr. Grace said.
Mr Grace cautioned that in all of the PPSSCC work,
estimated savings and revenue enhancements are more of a
"planning" quality and not of a precise "budget" quality.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT ON THE VETERANS ADMINISTRATION
Media Contacts:
Jack Babson
Ingersoll-Rand Company
(202) 223-6780
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
(202) 466-5170
Veterans Administration Task
Force Co-Chairs
William C. Douce
President and Chief
Executive Officer
Phillips Petroleum Company
Hans W. Wanders
Chairman and Chief
Operating Officer
The Wachovia Corporation
William L. Wearly
Chairman of the
Executive Committee
Ingersoll-Rand Company
Project Manager
Jack Babson
Ingersoll-Rand Company
THE REPORT RECOMMENDATIONS -- A PERSPECTIVE
To promote a realistic expectation of recommendations
reported, we have evaluated the'"supportability" of the
recommendations on their management merits and have grouped
these evaluations into three categories:
1850 K Street, N.W. ? Suite 1150 s Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
o Category I -- Fully substantiated and defensible.
Recommendations in this category
are, in the opinion of the Task
Force, convincing and deserving of
prompt implementation.
o Category II -- Substantially documented and
su ortable. Recommendations in
this category may not be fully
rationalized or documented in the
Report, but all indications point to
the desirability and defensibilty of
proceeding with their implementa-
tion.
o Category III -- Potentially justifiable and
supportable. Recommendations in
this category, while meritorious,
are not regarded as fully supported
in the Report, due to time,,
personnel resources, and other
constraints, but are deemed worthy
of further analysis to determine the
full extent of their merit for
implementation.
These category descriptions do not take into account
political, social or economic conditions which may alter the
supportability for implementing these recommendations.
Accordingly, it is possible, by grouping the recommendations
along the above categories, to more effectively assess the
cost savings that can be expected. In one case there are
recommendations which are fully supported (Error Prevention
VA-2) but the information available to estimate savings was
less than desirable.
Based on the Perspective and categorization, an
assessment of the reported recommendations is contained in
the matrix on the following page.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
Contacts:
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
(202) 466-5170
more than $10.2 billion over a
WASHINGTON, May 16--The Federal Government can raise
present outdated user fees,
for government products and
three-year period by
increasing
well as implementing new fees
services, according to a task force
report issued today by the President's
FEDERAL GOVERNMENT CAN INCREASE REVENUE BY $10.2 BILLION
OVER THREE YEARS BY UPDATING USER CHARGES
Control in the Federal Government
Private Sector Survey on
(PPSSCC).
considered on May 26th
by a Subcommittee of the Executive Committee chaired by
J. Peter Grace, chairman of W. R. Grace & Co., for possible
submission to the President.
The User Charges Task Force was co-chaired by James
Stewart, of Frank B. Hall and Company, Inc. of NEw York; and
Eugene Sullivan, chairman and chief executive officer of the
Borden Corporation of New York.
Overall findings from this task force include pricing
government products and services at market prices, and
establishing a centralized service and product planning
function in departments and agencies, which will help recommend
regular price adjustments and program improvements.
1850 K Street, N.W. ? Suite(f 1c&0 Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
-2-
The report also recommends that statutory authority of
collecting user fees be amended in order to overcome
administration difficulties created by court interpretations.
Specifically, the report issued findings relating to
the government's provision of recreation facilities;
maintenance and construction of inland and coastal waterways;
and inspection services.
Updating recreation and user fees in both the National
Forest and National Park Service would increase revenues and
help recover a greater percentage of operating expenses,
according to the report.
Inconsistent government policies are cited by the task
force as reasons for recommending an increase in user fees for
the inland and coastal waterways. Presently, 97 percent of
operating costs for locks, dams, etc. are paid for by U.S.
taxpayers, as opposed to 100 percent user fee funding of the
Highway and Land Transportation system.
The report also notes that users of electricity
received from Power Marketing Administrations have received
government benefit because the power is sold at rates designed
only to recover operating, maintenance, and construction
costs. The PPSSCC task force proposes improving the
rate-making process and establishing user fees for the Federal
Government to obtain funds without depriving users access to
hydroelectric power.
(more)
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
-3-
Increase in grazing fees for the Bureau of Land
Management and the National Forest Service was also proposed.
The task force also addressed problems created by
various interpretations of a Supreme Court decision in 1975
with regard to the Federal Communications Commission (FCC).
The report states that because of the ruling, the FCC has not
collected at least $240 million in fees that it could have, and
proposes implementing a $5 million cost accounting system.
This system would be used to establish a user fee schedule that
meets requirements established by the Court and, despite the
initial expense, would more than offset the cost of its
implemention by the revenue it would generate.
"Of the three-year total of $10.2 billion in revenue
enhancements, $1.2 billion are fully substantiated by adequate
documentation, and another $9.0 billion are partially
substantiated," Mr. Grace said.
Mr. Grace cautioned that in all of the PPSSCC 'work,
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
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 Approved For Release 2008/04/02: CIA-RDP85B01152R001201530001-7
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT ON USER CHARGES
Media Contacts:
James Clawson
O'Connor and Hannan
[phone]
Murray Sanders/Chris
Tofalli
The President's Private
Sector Survey on Cost
Control
[phone]
User Charges
Task Force Co-Chairs
James Stewart
Frank B. Hall and Company, Inc.
Eugene Sullivan
Chairman and Chief Executive Officer
Borden Corporation
Project Manager
James Clawson
O'Connor and Hannan
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
-It is important that the recommendations in this Task
Force Report be placed in perspective. They are the product
of a survey that was performed by private sector executives
and specialists whose services were volunteered -- primarily
on a part-time basis. This Task Force faced the formidable
task of bringing its expertise to bear on largely unfamiliar
and complex Federal operations in the short span of a few
months. Frequently, these efforts were expended while
holding down other full- or part-time employment.
The recommendations contained in this Report will
result, if implemented, in real and significant revenue and
other benefits to American taxpayers whose hard work and
personal sacrifices foot the bill for these Federal programs
and operations. When special beneficiaries begin to pay for
those goods and services received from the Government,, a
more equitable allocation of finite resources will occur.
We have sought to be realistic about the recommenda-
tions reported. It would be misleading for us to leave the
impression that each and every recommendation is rooted in
the research and analysis of the Task Force. Many of these
issues are not new, and have been considered by various
administrations at different times over the past years.
Frequently, political pressure, economic conditions or other
factors unrelated to the programs have prevented
implementation.
The recommendations presented in this Report are worth
serious consideration and implementation regardless of their
original source -- whether it is the agency, a particular
administration, the General Accounting Office, Congress or
the Task Force. To present a realistic expectation of the
recommendations reported, they have been grouped into three
categories of "supportability" (based on management merits):
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
o Category I -- Fully substantiated and defen-
sible. Recommendations -in 'this
category are, in the opinion of
the Task Force, convincing and
deserving of prompt
implementation.
o Category II -- Substantially documented and sup-
portable. Recommendations in uthis
category may not be fully substan-
tial or documented in the Report,
but all indications point to the
desirability and defensibility
of proceeding with their
implementation.
o Category III -- Potential justifiable and suj
portable. Recommendations in this
category, while meritorious, are
not regarded as fully supported in
the Report but are deemed worthy
of further analysis to determine
the full extent of their merit for
implementation.
These category descriptors do not take into account
political, social or economic conditions which may alter the
supportability of these recommendations for implementation.
Accordingly, it is possible, by grouping the recommendations
in the above categories, to assess more effectively the
revenue generation that can be expected. This analysis
permits summary estimates of firm, probable, and potential
revenue.
The Report Recommendations _ An Assessment
Based on the above perspective and categories, an
assessment of the reported recommendations is contained in
the matrix on the following pages.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
General
USER 1: User charges program management
Recreation
USER 2: Update the recreation user
fee schedule of the Army
Corp of Engineers
USER 3: Update the recreation user
fee schedule of the National
Forest Service
USER 4: Update the recreation user
fee schedule of the National
Park Service
USER 5: Improve the rate-making process
of Power Marketing Authorities
USER 6: Increase grazing fees for
the Bureau of Iand Management
USER 7: Increase grazing fees for
the National Forest Service
USER 8: Recover fees from the
free firewood program
USER 9: Recover publication costs of
Soil Conservation Service
USER 10: Recover full-cost for
foreign military sales
* Issue not quantified.
CATEGORY/3-YEAR REVENUE
OPPOR7UNITIES
1$ miilions-y
$ 56.6
$ 4,542.9
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
CATB3c RY/3 YEAR REVENUE
OPPORTUNITIES
nullions
Inspection and Grading
USER 11: Update the fee schedule of the
Agricultural Marketing Service $ 29.4
USER 12: Recover the costs for inspec-
tion and weighing services 6.1
USER 13: Update the fee schedule for
HUD housing inspections 1.3
Regulator and Licensing
USER 14: Collect application
fees for FCC services $ 132.4
providing FOI requests 231.7
USER 15: Recover regulatory
service costs for FERC 76.8
ial Services
USER 16: Recover user fees for
Coast Guard services
USER 17: Recover the cost of
USER 18: Increase user fees
for Custans services 363.5
Transportation
USER 19: Recover costs for Corps of
Engineers services in deep
draft harbors and channels
USER 20: Update the user fee schedule for
the nation's inland waterways
USER 21: Establish a management informa-
tion system and maintain current
pricing in the Flederal Highway
Administration
$ 1,986.0
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USER 22: The President should establish
user charge program management as
a priority for increased revenue
generation as detailed in combined
issues from released PPSS reports
released as of May 16, 1983
7btal Revenue by Category
CATS Y/3-YEAR REVMJE
OPPORTUNITIES
mullions
I
II
III
$ 6041.2
$ 4458.9
$9.9
$ 7235.2
$13,476.1
$9.9
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
ELL It I t 1111111106-4
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
Murray Sanders/Chris Tofalli
The President's Private Sector
- Survey on Cost Control
[phone]
CITING DELINQUENT TAXES AS CAUSE FOR CONCERN,
REPORT RECOMMENDS IMPROVEMENTS AT THE
DEPARTMENT OF TREASURY
WASHINGTON, June 30--Citing $23.2 billion in delinquent
taxes and growing non-compliance with the tax system totaling
over $100 billion as causes for concern, a report released
today by the President's Private Sector Survey on Cost Control
recommended improvements in internal operations and management
which, if fully implemented, could result -- over a three year
period -- in cost savings/revenue enhancements of $5.5 billion
and accelerated revenues of $6.1 billlion.
These recommendations and others will now be considered
on July 13th by a Subcommittee of the Executive Committee
chaired by J. Peter Grace, chairman of W. R. Grace & Co.,, for
possible submission to the President.
The Department of the Treasury task force was co-chaired
by Alfred Brittain, chairman of the board of Bankers Trust
Company of New York; WiM m nonaldson, chairman of Donaldson
Enterprises of New York; and John H. Filer, chairman and chief
executive officer of Aetna Life and Casualty Company of
Hartford, Connecticut.
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
Specific recommendations to alleviate the problem of
delinquent taxes and non-compliance include: increased
staffing based upon projected workload volumes, combining the
taxpayer service and collection activities into one division,
use of payroll deductions or automatic bank transfers in
collecting all installment payments on delinquent taxes,
prioritizing delinquent accounts for purposes of accelerated
collection, and legislative approval of the expanded use of
commercial credit bureau reports.
The report also recommends the establishment of a
decentralized appellate tax board to expedite the resolution of
small tax cases, which now occupy 40% of the Appeals Court's
time, so as to allow accelerated collection on smaller cases
and the dedication of scarce resources to high-dollar value
cases.
In calling for improved collection techniques, the task
force noted that the IRS is presently in the process of
replacing its outdated computer system, which should provide
three times more effective processing than present computers.
At the same time, however, the report called for a
comprehensive plan to coordinate the balancing of IRS service
centers' workload with the implementation of this new equipment.
(more)
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
Other recommendations contained in the report include a
reduction in the number of IRS Service Centers which will be
made possible as a result of updated computer operations,
relocation of the Treasury Department minting functions, and
changes in the process currently used for printing one dollar
bills.
The report also recommends streamlining U.S. Customs
operations and procedures and changes in the Bureau of Alcohol,
Tobacco and Firearms (BATF).
Included in the report are recommendations for
consolidating border functions (Customs and Immigration and
Naturalization Service); transferring responsibility for
criminal enforcement from BATF to the Secret Service (for
firearms and explosives) and to Customs (alcohol and tobacco);
reductions in Customs regions, districts, and ports and the
streamlining of remaining facilities through the "Area Concept"
of a lead and satellite structure; and continued emphasis on
improved computerized support for Customs and BATF activities.
"Of the three-year total of $5.5 billion in savings, $2.0
billion are fully substantiated by adequate documentation, and
another $3.5 billion are partially substantiated," Mr. Grace
said.
Mr. Grace cautioned that in all of the PPSSCC work,
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
TASK FORCE REPORT ON THE DEPARTMENT OF THE TREASURY
Media Contact:
Thomas Parisi
Bankers Trust Company
[phone]
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
The Department of the Treasury
Task Force Co-Chairs
William Donaldson
Chairman
Donaldson Enterprises,, Inc.
John H. Filer
Chairman & CEO
Aetna Life Casualty Co.
Alfred Brittain, III
Chairman of the Board
Bankers Trust Company
Project Manager
Bob Maxon
Aetna Life & Casualty
THE REPORT RECOMMENDATIONS -- A PERSPECTIVE
As the product of an unprecendented and wide-ranging
survey performed by private sector executives and
specialists, the recommendations in this Task Force report
must be placed in perspective. Our volunteer staff had
the formidable task of bringing their expertise to bear on
complex Federal operations in the short span of a few
months while holding down other full or part-time
employment.
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85BOl152R001201530001-7
Despite these challenges -- most of which were antici-
pated at the outset -- valuable analysis and issue develop-
ment were achieved. The recommendations contained in this
Report will result, if implemented, in real and significant
savings and other benefits to American taxpayers whose hard
work and personal sacrifices financially support these
Federal programs and operations.
We believe that the majority of our recommendations
are fully substantiated. However, it would be misleading
to allege that each and every recommendation is rooted in
uniformly high levels of research, analysis, and substantia-
tion. Various time limitations, business resources, and
other constraints did not permit achievement of the desired
uniformity objective.
We have evaluated, therefore, the "supportability" of
the recommendations on their management merits and have
grouped them into the following three categories.
o Category I -- Fully substantiated and defensible.
Recommendations in this category
are, in the opinion of the Task
Force, convincing and deserving of
prompt implementation.
o Category II -- Substantially documented and support
able. Recommendations in this cate-
gory may not be fully rationalized
or documented in the report, but all
indications point to the desirability
and defensibility of proceeding with
their implementation.
o Category III -- Potentially justifiable and suppor-
table. Recommendations in this cate-
gory, while meritorious, are not
regarded as fully supported in the
Report due to time, personnel
resources, and other constraints, but
are deemed worthy of further analysis
to determine the full extent of their
merit.
These category descriptions do not take into account
political, social, or economic conditions that may alter
the supportability of these recommendations for implementa-
tion. Accordingly, it is possible, by grouping the recom-
mendations along the above categories, to assess more
effectively the cost savings that can be expected. This
analysis permits summary estimates of firm, probable, and
potential savings.
The Report Recommendations -- An Assessment
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in
the matrix on the following page.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
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Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
2A
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
Bill McCaffery
Equitable Life insurance
[phone]
4
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
BUSINESS GROUP OUTLINES UP TO $4.4 BILLION IN SAVINGS
AND REVENUE GENERATION POTENTIAL FOR DOT
WASHINGTON, April 18--A savings and revenue enhancement
plan of up to $4.4 billion was outlined today for the Department
of Transportation (DOT) by the President's Private Sector Survey
on Cost Control in the Federal Government (PPSSCC). These
recommendations will be considered on May 2nd by a Subcommittee
of the Executive Committee chaired by J. Peter Grace, chairman of
W. R. Grace & Co. of New York, for possible submission to the
President.
The PPSSCC DOT Task Force was co-chaired by Coy G.
Eklund, chairman and chief executive officer of Equitable Life
Assurance Society of the United States in New York; Thomas G.
Pownall, president and chief executive officer of Martin Marietta
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
Corporation of Bethesda, Maryland; William H. Spoor, chairman and
chief executive officer of Pillsbury Co. of Minneapolis; Terry
Townsend, chief executive officer of Texas Motor Transpprtation
As4ociati_on of Austin, Texas; and L. Stanton Williams, chairman
and chief executive officer of PPG Industries of Pittsburgh.
The major findings of the DOT Task Force are to
consolidate the safety functions of the Federal Highway
Administration (FHWA), Federal Railroad Administration (FRA),
Urban Mass Transportation Administration (UMTA), and National
Highway Traffic Safety Administration (NHTSA) into one Land
Transportation Safety Administration (LTSA).
The report also suggests consolidating FHWA and UMTA
into one Surface Transportation System.
The task force report also proposed consolidating
Federal Aviation Administration facility locations because of
newly-emerging technologies and changes in aviation patterns.
Implementing a schedule of Coast Guard user fees to
recoup all operating and support costs associated with providing
services to marine users was also proposed by the study group.
Approximately $2.7 billion of the total $4.5 billion is
recommended savings with another $1.7 billion suggested for
revenue enhancements.
(more)
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"Of the three-year total of $4.4 billion in savings and
revenue enhancements, $2.9 billion are fully supported by
adequate documentation, and another $1.5 billion are partially
supported," Mr. Grace said. Mr. Grace also said anothei $137
million in savings and revenue generation opportunities require
further study.
Mr. Grace cautioned that in all of the PPSSCC work
estimated savings and revenue enhancements are more of a
"planning" quality and not of a precise "budget" quality.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT FOR THE DEPARTMENT OF TRANSPORTATION
Media Contacts:
William McCaffery
Equitable Life Assurance
Society of the O.S.
[phone]
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
Dept. of Transportation Task
Force Co-Chairs
Coy G. Eklund
Chairman and Chief Executive
Officer
Equitable Life Assurance
Society of the U. S.
Terry Townsend
Chief Executive Officer
Texas Motor Transportation
Association
L. Stanton Williams
Chairman and Chief Executive
Officer
PPG Industries
William H. Spoor
Chairman and Chief Executive
Officer
Pillsbury Co.
Thomas G. Pownall
President and Chief
Executive Officer
Martin Marietta Corp.
Project Manager
Bill McCaffery
Equitable Life Assurance
Society of the U.S.
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
THE REPORT RECOMMENDATIONS -- A PERSPECTIVE
It is important that the recommendations in this Task
Force Report be placed in perspective. They are the product
of-an unprecedented and wide-ranging survey that was per-
formed by private sector executives and specialists whose
services were volunteered. This Task Force had the formid-
able charge of bringing their expertise to bear on largely
unfamiliar and complex Federal operations in the short span
of a few months.
Despite these difficult and perplexing challenges, a
great deal of valuable work was performed. The recommenda-
tions contained in this Report will result, if implemented,
in significant savings.
We have sought to be realistic about the recommen-
dations. The great majority of them, we believe, are fully
substantiated. However, it would be misleading for us to
leave the impression that each and every recommendation is
rooted in a uniformly high level of research and analysis.
The press"of time did not always permit the luxury of
achieving this desired uniformity.
To place the recommendations in a perspective that
emphasizes their "supportability", we have grouped them into
three categories.
o Category I -- Fully substantiated and defensible.
Recommendations in this category are,
in the opinion of the Task Force,
convincing and deserving of prompt
implementation.
o Category II -- Substantially documented and
supportable.
Recommendations in this category may
not be fully rationalized or docu-
mented in the Report, but all indi-
cations point to the desirability and
defensibility of proceeding with
their implementation.
o Category III -- Potential_ Justifiable and
supportable. Recommendations in this
category, while meritorious, are not
regarded as fully supported in the
Report, due to a variety of con-
straints, but are deemed worthy of
further analysis to determine the
full extent of their merit for imple-
mentation.
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We recognize that changing political, social or
economic conditions could alter the supportability of these
recommendations. This categorization does, however? permit
us to assess the likelihood of our recommendations being
.adopted in the very near future.
The following table graphically displays each 'issue and
its recommendations by the category into which it best fits,
and the associated cost savings or revenue generation.
[Table I on following page]
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THE REPORT RECOMMENDATIONS -- A PERSPECTIVE
3-year Savings (S)/
Revenue (R)
($ millions)
f recamnerdations
issue
TRANS It Research and Development
KRANS 2: Cash Management
TRANS 3: Grant Management Contml
TRANS 4: Regional Office and
Support &penses
TRANS 5: Automated Data Processing
TRANS 6: Federal Highway Program
Categories
TRANS 7: Federal Highway Regulatory
Requirements
TRANS 8: Reorganization of Land Modes
Operations
TRANS 9: Urban Mass Transportation
Requirement Review
TRANS 10: Consolidate FRA Safety
and RED f unctions and
collect user fees
TRANS 11: Reorganize Land Safety
Functions
TRANS 12: Grantee Land Acquisition
TRANS 13: Consolidate Federal Land
Road Transportation
Responsibilities
TRANS 14: Review Uniform Tire Quality
Grading System
TRANS 15: FAA Organization and Staffing
TRANS 16: Closing law-Volume Control
or 1bwers
TRANS 17: Metropolitan Washington
Airports
TRANS 18: FAA Flight Service Station
Consolidation
TRANS 19: Shifting Costs of Coast
Guard services
TRANS 20: Maritime Administration
Subsidy Reform
TRANS 21: Reform of the Ship
Financing Program
TRANS 22: Federal Funding for Marine-
Related Education
Total cost savings
by category (S)
7btal revenue generation
by category (R)
Total
ELI
$ 284.1 (S)
144.4 (S)
163.5 (S)
45.0 (S)
46.4 (S)
983.1 (S)
223.4 (S)
71.3 (S)
65.6 (S)
3.4 (S)
78.5 (R)
14.9 (S)
11.4 (S)
17.9 (S)
3.3 (S)
445.4 (S)
150.9 (S)
57.5 (R)
39.6 (S)
1572.7 (R)
75.4 (S)
26.5 (R)
29.5 (S)
$1205.5 (S)
$1476.1
$136.9 (S
1656.7 (R)
78.5
2862.2
1554.
136
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
INTERNATIONAL AFFAIRS AGENCIES CAN SAVE $719 MILLION
ACCORDING TO PRIVATE SECTOR SURVEY REPORT
WASHINGTON, May 16--The President's Private Sector
Survey on Cost Control in the Federal Government (PPSSCC) today
released a task force report highlighting a three-year savings
potential of $719 million for the Department of State, the
Agency for International Development (AID) and the U.S.
Information Agency (USIA).
These recommendations will be considered on May 26th
by a Subcommittee of the Executive Committee chaired by
J. Peter Grace, chairman of W. R. Grace & Co., for possible
submission to the President.
The Department of State/USIA/AID Task Force report was
co-chaired by J. Rawles Fulgham, executive director of Merrill
Lynch Private Capital, Inc. of Dallas, and vice chairman
(retired) Inter First Corp. and George L. Shinn, chairman and
chief executive officer (retired) of First Boston Corporation
of New York.
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
-2-
The Task Force surveyed the international affairs
agencies--the Department of State (State), Agency for
International Development (AID) and U.S. Information Agency
(USIA)--to identify opportunities for increased efficiency and
reduced costs, to determine areas to enhance managerial
accountability, to suggest managerial operating improvements
and to pinpoint specific areas for further study.
Potential savings can be achieved by the State
Department by revising certain provisions of the retirement
system, including raising the retirement age and by improving
refugee loan collection procedures. The report also suggests
better positioning for foreign currency needs by establishing a
foreign currency futures/forward desk to minimize risks in
foreign currency fluctuations.
Recommendations for AID include eliminating burdensome
project paperwork and increasing the interest rate on AID loans
which have not paralleled Federal borrowing costs. Also, the
report proposes enforcing the overseas assignment period of
four yeas and obtaining relief from the Cargo Preference Act
for AID sponsored shipments.
(more)
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-3-
The report states that application of these business-
like managerial skills and controls could significantly enhance
the government process and can result in immediate quantifiable
budgetary savings.
"Of the three-year total of $719 million in savings,
$715 million are fully substantiated by adequate documentaion,
and another $4 million are partially substantiated,"
Mr. Grace said.
Mr. Grace cautioned that in all of the PPSSCC work,
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT ON STATE/AID/USIA
Media Contacts
Art Scutro
First Boston Corporation
[phone]
Murray Sanders/Chris
Tofalli
The President's Private
Sector Survey on Cost
Control
[phone]
State/AID/USIA/Peace Corps
Task Force Co-Chairs
George L. Shinn
Chairman & Chief Executive Officer
First Boston Corporation
J. Rawles Fulgham
Executive Director
Merrill Lynch, Private Capital, Inc.,
Vice Chairman (Retired)
Inter First Corporation
Project Manager
Art Scutro
First Boston Corporation
As the product of an unprecedented and wide-ranging
survey performed in a political atmosphere by private sec-
tor executives and specialists, the recommendations in this
Task Force Report must be placed in perspective. Our
volunteer staff had the formidable task of bringing their
expertise to bear on the complex Federal operations in the
short span of a few months while holding down other full-
or part-time employment.
Despite these challenges -- most of which were antici-
pated at the outset -- valuable analysis and issue develop-
ment were achieved. The recommendations contained in this
Report will result, if implemented, in real and significant
savings and other benefits to American taxpayers whose hard
work and personal sacrifices financially support these
Federal programs and operations.
1550 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
We believe that the majority of our recommendations
are fully substantiated. However, it would be misleading
to allege that each and every recommendation is rooted in
uniformly high level of research, analysis and substanti-
ation. Various time limitations, business resources, and
other constraints did not permit achievement of the desired
uniformity objective.
We have evaluated, therefore, the "supportability" of
the recommendations on their management merits and have
grouped them into the following three categories.
o Category I -- Fully substantiated and defensible.
Recommendations in this category are,
in the opinion of the Task Force,
convincing and deserving of prompt
implementation.
o Category II -- Substantially documented and
portable. Recommendations in this
category may not be fully rational-
ized or documented in the Report, but
all indications point to the desira-
bility and defensibility of proceeding
with their implementation.
o Category III -- Potentially justifiable and sup-
portable. Recommendations in this
category, while meritorious,-are not
regarded as fully supported in the
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
Report, due to time, personnel
resources, and other constraints, but
are deemed worthy of furfher analysis
to determine the full extent of their
merit for implementation.
These category descriptions do not take into account
political, social or economic conditions which may alter
the supportability of these recommendations for implementa-
tion. Accordingly, it is possible, by grouping the recom-
mendations along the above categories, to assess more
effectively the cost savings that can be expected. This
analysis permits summary estimates of: (1) firm, (2) prob-
able,-and (3) potential savings.
The Report Recommendations -- An Assessment
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in
the following matrix:
3-year savings by
category with savings/
revenue/cash accelera-
tion indicated
State 1:
Foreign Service Personnel
System
o Use models to correct skewed
distribution (STATE 1-1) $42.4(S)
o Review ranking of positions,
realign personnel (STATE 1-2) 19.9(S)
o Eliminate overcomplement
employees (STATE 1-3) 24.0(S)
o Redesign the performance
evaluation system and train
supervisory personnel
(STATE 1-4) --
o Amend the FSA 1980 to expand
definition of management official
(STATE 1-5)
o Improve recruiting and training
(STATE 1-6)
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STATE 2:
Disability System and Foreign
Service Retirement
".Increase retirement age
:(STATE 2-1)
3-year savings by
category with savings/
revenue/cash accelera-
tion indicated
$ 56.7(S)
o Change the benefit formula
(STATE 2-2) 33.9(S)
STATE 3:
Office of Foreign Buildings
o Develop a real property
management system (STATE 3-1)
o Properly allocate operating
and maintenance expenditures
(STATE 3-2)
o Expand cost accumulation
report (STATE 3-3)
o Consolidate fiscal authority
(STATE 3-4)
o Provide guidelines for
identification of excess
capacity (STATE 3-5)
STATE 4:
Purchase of Foreign Currencies
0 Develop an accounting system
to gather foreign currency needs
(STATE 4-1)
.0 Establish foreign currency
futures/forward desk
(STATE 4-2)
17.1(5)
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3-year savings by
category with savings/
revenue7Cash accelera-
tion indicated
o Hire staff and define
functions of trading desk
(STATE 4-3)
STATE 5:
Refugee Programs
o
Rectify the collection
problem; require sponsor
$ 55.9(CA)
guarantee (STATE 5-1)
$ 11.7(S)
0
Improve monitoring program
(STATE 5-2)
0.0 (S)
o
Develop tracking and integrated
data base (STATE 5-3)
(3.0) (S)
STATE 6:
Project Planning, Approval, and
Monitoring Process
o Increase the dollar value of
block grants (STATE 6-1)
0 Request Congress to return
deobligation/reobligation
authority to AID (STATE 6-2)
o Find additional ways to
increase decentralization of
authority (STATE 6-3)
0 Limit the time spent responding
to Congress (STATE 6-4)
0 Move to a two-year budget
submission cycle (STATE 6-5)
7.1(S)
6.3 (S)
7.1 (S)
6.3(S)
6.0(S)
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
3-year savings by
category with savings/
revenue/cash accelera-
tion indicated
STATE 7:
Interest Rates on AID Loans
o Establish a base lending rate
(STATE 7-1) 360.0(R)
o Establish a uniform set of
criteria for the determination
of loan terms (STATE 7-2)
STATE 8:
Foreign Service Rotation Policy
o Enforce four-year tours
(STATE 8-1) $ 5.3(S)
STATE 9:
Cargo Preference
o Seek relief from cargo
preference for AID-sponsored
shipments (STATE 9-1)
STATE 10:
Evaluative Procedures
o Establish analytical resource
capability (STATE 10-1)
o Defer expenditure for planned
expansions (STATE 10-2)
118.5(S)
Total cost savings (S) $355.2 $4.1
Total revenue generation (R) $360.0 Total cash acceleration (CA) $ 55.9
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2C
THE PRESIDENT'S PRIVATE SECTOR S%JKVET ON COST CONTROL
Contacts:
David Cullen
National Federation of
Independent Businesses
[phone]
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
BUSINESS GROUP IDENTIFIES UP TO $54 BILLION IN CASH
ACCELERATION OPPORTUNITIES AND $25 BILLION IN SAVINGS AND
REVENUE ENHANCEMENTS IN GOVERNMENT THROUGH BETTER ASSET
MANAGEMENT fiNANW &- ASS...'t MRN
WASHINGTON, April 18--The President's Private Sector
Survey on Cost Control in the Federal Government (PPSSCC) today
suggested possible economic benefits for the U. S. government
through better asset management, which can total approximately
$25 billion over three years.
Additionally, the report states that, over three years,
an estimated $54 billion can be placed in the hands of the
government more quickly by adopting better.cash management
techniques." This would have a one-time cash flow impact which
could be applied to reducing the Federal deficit in the first
year of implementation only.
These recommendations will be considered on May 2nd by
a Subcommittee of the Executive Committee chaired by J. Peter
Grace, chairman of W. R. Grace & Co. of New York, for possible
submission to the President.
(more)
1AS!1 K St~e~t. P~. `, `. ~! 5t,et^ 1 ?ti'"'o ~~~ ', .;?Q '- Vs
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
The PPSSCC Financial Asset Management Task Force was
co-chaired by Edward W. Duffyr chairman and chief executive
officer of Marine Midland Bank of Buffalo, New York; Wilson
Johnson, president of the National Federation of Independent
Businesses in San Mateo, California; and Edward A. Rust,
president of State Farm and Casualty in Bloomington, Illinois.
The task force divided its efforts for improving fiscal
management activities into three categories: Cash Management,
loan making and debt collection.
Cash management recommendations include slowing
payments to contractors by the Department of Defense; speeding
the collection and deposit of government receipts; and utilizing
such management tools as electronic fund transfers, automatic
account withdrawal, and controlling advances by letters of credit.
These recommendations would result in better utilization of
available funds and reduce interest costs to the Government.
According to the task force report, debt collection
improvement could be accomplished by institutionalizing credit
management in each agency, purchasing modern automated data
processing equipment, improving debt collection efforts to speed
collections,.using collection agencies and credit bureaus to
supplement the collection' and credit granting efforts of the
Government, and charging interest and penalties on delinquent
debt.
(more)
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The report suggested that Government loans should be
made less attractive to borrowers by increasing rates and fees
similar to those of private lenders, implementing late charges
and penalties to improve collections, and raising interest rates
to market levels.
"Of the three-year total of $25 billion
in savings,
$17.7 billion are fully supported by adequate documentation, and
another $6.9 billion are partially supported," Mr. Grace said.
Mr. Grace cautioned that in all of the PPSSCC work
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT ON ANCIAL ASSET MANAGEMENT
Media Contacts:
David Cullen
National
independent Businesses
Washington, DC
[phone]
Murray Sanders/Chris Tofalli
The =Veslonn~ostpControlSector
survey
Co-Chairs for the ement
g ni anci_a Asse t Ka
as Force
Edward Duffy
Chairman and Chief
Executive Officer
Marine Midland Bank
Wilson Johnson
Chairman and President
National
Independent Businesses
Edward B. Rust
president
State Farm i casualty
Pro eet Manager
Bruce Fielding
Fielding. Locksley i Corp.
Corp.
storek Accountancy
~- pTRSPLCTSV'E
"PORT
Plant that the rscomaaendati~eyiare
It is vitally important in pe"Pect
t ive.
t be placed survszi is
the Task !ores Report and vide - ranging
the product of an ~'plitically-charged atmosphere by p
was performed in a po cialists whose services were
rt-time basis. This staf a= a d
sector exec .. of tendon a pa their expertise to be
the formidable evolunteered ?- Opel in the
the lYflftask of bringing y.deral oprati efforts were
largely of a unfamiliar and comp uently. e employ-
short span a isM- months ? o her full or part-time expended while holding down
sent.
1450 K Street N.W. ? Suite 1150 ? g,'r_'":ingten. D.C.
C2 )21 W-517
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@
Despite these difficult and perplexing ch`llenge deal
? all of which were anticipated at the onset ecommendat__
The
of valuable work was performed. rons
# in
in this resulte
real and significant savings and
taxpayers whose hard work and personal sacrifices foot the
bill for these Federal programs and operations.
We have sought to be realistic about the recommenda-
tions reported. The great majority of them, we believe, are
fully substantiated. However, it would be misleading for us
to leave the impression that each and every recommendation
research.
is rooted in a uniformly ofvtim of
substantiation press
mitments, lack of adequate resources, and other constraints
did not always permit the luxury of achieving this desired
uniformity.
As a result, and to promote a realistic expectatiionaof
recommendations reported, we have evaluated the *support-
bility" of the rechemeintoithzasneategoriss~9ement merits
them
and have grouped
0 Catetgory
0 Category II --
Tullsubstantiated and
defensible. Recommendations in
t his category are, in the opinion
of the Task T
deservingofprompt implementa-
tion.
BubstantiallY documented and
su rtable. Recommendations in
is category may not be fully
rationalised or documented in the
Report, but all indications point
to the desirability and defensi-
bility of proceeding with their
implementation..
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o Category 121 -- potentialll ustifiable and
table Recommendations in
These category descriptors do t+o alter the
p
sabilit oliortal, ety of these recommendationssforiimplementation.
Accordingly, Y it is possible, by grouping the recommendations
Accordingly.
along the above categories, to assess more effectively the
mits
cost savings that can be expected. probable, anal
and (r)
summary estimates of: (1) firm, (2) p a
potential savings.
The Report Recommendations -- An Assessment
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in
the following matrix:
Categorization of Savings Category/3 Year Cash
Acceleration/Savings/
su r ?
s category, while meritorious,
are not regarded as flYeue to
supported in the Report#
? time, personnel resources, and
other constraints, but are deemed
worthy of further analysis to
mfor implementation. of their
merit
t take into account
A. Cash Management
Asset 1: Revise Department of
Defense progress payment rates.
Asset 2s Speed the collection
and deposit of Government
receipts.
Asset 3s Increase the use of
e ectronic funds transfers and
other means to improve cash
collections.
sifons)
i $
15,355 (CA)
2,532 (S)
6,705 (CA)
2,255 (S)
6,437(CA)
l s606 (S)
Asset 4: Utilize payment by due
f credit for
3,626(CA)
1,103 (R)?
date and letters o
checks paid to slow disbursements.
1,618 (5)
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? 1,368 (CA)
..Asset 5: Expedite the disposal 694 (S)
o Commodity Credit Corporation
inventory by increasing flszi-
bility of P.L. 480 and designate
a portion of food stamps for
dairy products.
Asset 6: Establish direct 1,922(CA)
transfer 636 (5)
eposlefoz benefit and
incentives payroll check disbursements.
Asset 7: Improve the monitoring 1,016(CA)
and use of Government banking 337 (S)
fund and supervised accounts
to obtain interest or to
reduce borrowing costs.
?
Asset 8: Modify the budget system
to provide agencies with financial
incentives to improve cash
management and forecast.
Asset 9: Provide agencies with ? .
a ministrative incentives and
controls to perform cash management.
?
Asset 10: Make greater use of
n lvi ual incentives to improve
cash flow forecasting and cash
management.
$. Direct Government Lending
Asset il= Require fees foloan 2,882 (R)
origination. servicing and
delinquency.
Asset 12: Improve the loan 5,572(CA)
process in the granting. 1.010 (S) -
servicing and collecting
of direct loans* Asset 13: Encourage private 182 (R) enders to a larger partiei- 3 Z3( (Si
i
pation of loans where conditions
are commercially acceptable.
Category/3 year Cash
Acceleration/Savings/
i
ties
evenue ppDOrtun
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CategorY/3 Year Cash
Acceleration/Savings/
vin11 ?pQI4tU___
? AI III
15 (R)
Asset 14: Reduce loans in the 6 (S)
Ural Electrification Adminis-
tration and Export-Import tank
as these could be made in the
private sector.
Asset 15: Raise loan interest
sates to market levels.
Asset 16: State acceptable
maximum default levels in direct
loan programs to monitor loan
delinquencies.
Asset 17: Establish termination
dates for direct loan programs
when legislation is implemented.
626 (CA)
137 (S)
2,371 (R)
C. Guaranteed Government Lendinn
Asset 18: Gradually phase out 1,724 (R)
Farmers Rome Administration and 101 (S)
Small Business Administration 76(CA)
direct loans to guaranteed ones.
Asset 19: Increase the Guaranteed 1,572 (R)
Student Loan origination fee.
Asset 20: Establish certified lender 219 (S1
programs to save. processing costs.
Asset 21: Structure guarantee 84 (R)
programs to encourage the private 66( S)
sector to assume a larger share 10 of risk.
Asset 22: Reduce lederal Housing
in stration role in mortgage
insurance to only the subsidised
ones.
Asset 231 Improve budget informa-
iion to show the present value of
expected future cost of loan
guarantees.
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Asset 24: Reduce interest rate
subsi ies in Federal credit
programs to increase productivity
and economic officiencY.
Asset 25: Implement credit
else- ere and credit worthiness
tests in all Federal guarantee
programs.
Category/3 Year Cash
Acceleration/Savings
D. Debt Collection
Asset 26: Improve debt col- 8,100(G)
ection efforts to speed 1,191 (5)
collections.
Asset 27: Offset dentsrtolthe (CA397 )
S)
vsrnment against
Revenue Service tax refunds.
Asset 28: Use collection 1 , 489 (G)
307 lS)
age- a nc and credit bureaus to
supplement the collection and
credit granting of the
Government.
Asset 29: Change interestband 1.085 (R)
pe ties on delinquent
Asset 30: Dispose of repossessed 180( 51 37 property more quickly.
Z. Government Securities
484 (S)
Asset 31: Reflect the activity
Financing Bank in
of the Federal F.
the Unified Budget
Asset 32: Discontinue issuing 23 (S)
securities in bearer and registered
form.
5 (5)
Asset 33: Use electronic funds
Vans er to pay interest on
Treasury securities.
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Category/3 Year Cash
Acceleration/Savings/
Asset 34: Develop a Government-
vide standard financial and
accounting management system.
Asset 35: Provide agencies and
epartments with improved
financial asset management
training programs.
Total revenue generation by
category (R)
Total cost savings by
category (S)
Total amount of cash
acceleration by
category (CA)
-
I III
$ $
$ 5,154
$ 3,664
$12,585
$ 1,024
$53,021
$ 1,445
* Management improvement, no quantification available.
(CA) It is important to note that the amounts reported as cash
acceleration in the issue and Recommendations Summaries which
follow will have a one-time onlX impact on reducing the Federal
deficit in year one. Absent of an increased level of acceleration
in year two, the Federal deficit will return to the year one
balance, prior to any reduction of accelerations.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
Robert Hacking
.Ernst & Whinney
[phone]
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
REAGAN BUSINESS PANEL OUTLINES MORE THAN $1 BILLION SAVINGS
AND REVENUE ENHANCEMENT PLAN FOR INTERIOR DEPARTMENT
WASHINGTON, April 18--The Department of Interior can
.save approximately $265 million over a three-year period and can
achieve revenue increases of more than $1 billion according to a
task force report made public today by the President's Private
Sector Survey on Cost Control (PPSSCC). These recommendations
will be considered on May 2nd by a Subcommittee of the.Executive
Committee chaired by J. Peter Grace, chairman of W. R. Grace &
Co. of New York, for possible submission to the President.
The PPSSCC task force on the Department of Interior was
co-chaired by George Anderson, chief executive officer of
Anderson, ZurMuehlen and Company of Helena, Montana; Morley
Thompson, president of Baldwin-United Corporation of Cincinnati,
Ohio; and Hays Watkins, chairman and chief executive officer of
CSX Corporation of Richmond, Virginia.
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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More than $260 million in savings are recommended by
the Interior Task Force, including placing land-sale revenue in
the general fund, and leasing rangelands under long-term
agreements of 99 years, which would shift the maintenance,
management and improvement of the rangelands to the permit
In addition to the savings recommendations, the task
force also recommended more than $1 billion in revenue
enhancements, to:
1. Sell excess public lands (excluding parks,
wilderness areas, environmentally sensitive areas,
and similar lands) which.would raise $900 million
while only accounting for less than 1 percent of
lands under the control of the Bureau of Land
Management and about .5 percent of all public
domain lands.
2. Increase grazing fees to fair market value.
3. Adopt pending legislation to increase entry fees at
National Parks.
4. Improve the concessioner competition and adopt the
Visitor Facility Fund Bill
"Of the three year total of more than $1 billion in
savings and revenue enhancements, $241 million are fully
supported by adequate documentation and another $1 billion are
partially supported," Mr. Grace said. Mr.Grace also said
another $1.9 million in savings and revenue generation opportunities
over a three-year period require further study.
Grace cautioned that in all of the PPSSCC work
estimated savings and revenue enhancements are more of a
"planning" quality and not of a precise "budget" quality.
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THE PRESIDENTS PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT FOR THE DEPARTMENT OF INTERIOR
Media Contacts:
Robert Hacking
Ernst i Whinney
[phone]
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
Department of Interior
Co-Chairs
George Anderson
Chief Executive Officer
Anderson, ZurMuehien and
Company
Hays Watkins
Chairman and Chief
Executive Officer
CSX Corporation
Morley Thompson
President
Baldwin-United Corporation
William Coleman, Esq.
O'Melveny and Myers
Project Manager
Robert Hacking
Ernst i 1Phinney
THE REPORT RECOMMENDATIONS -- A PERSPECTIVE
It is vitally important that the recommendations in this
Task Force Report be placed in perspective. They are the
product of an unprecedented and wide-ranging survey that was
performed in a politically charged atmosphere by private
sector executives and specialists whose services were
volunteered -- often on a part-time basis. This staff had
the formidable task of bringing its expertise to bear on
largely unfamiliar and complex Federal operations in the
short span of a few months. Frequently, these efforts were
expended while holding down other full or part-time
employment.
1850 K Street. N.W. a Suite 1150 a Washington, D.C. 20006
[phone]
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Despite these difficult and perplexing challenges all
a great deal of
rfoormed. the onset __ contained
of Which anticipated at valuable w worerk was as Pee
vo
in this Report, if implemented,-will result in real and
significant savings and benefits sacrifices Americabilln
whose hard work and personal sacrif operations.
these Federal programs and op
isle have sought to be re~liti~heabout
Wetbelieve~areafully
reported. The great majority of
ng for us to
lreciommendation is
substantiated. vthatieachuand every
leave the impression
rooted in a uniformly high level of research, analysis, and
substantiation. The press of time, other business
commitments, lack of adequate resources, and ootaehieving
contraints did not always permit
this desired uniformity.
As a result, and to promote a realistic expectation of
recommendations reported, we have evaluated the
"supportability" of the recommendations on their management
merits and have grouped them into three categories.
o Category I -- Full substantiated and defensible.
Recommendations in this category
are, in the opinion of the Task
Force, convincing and deserving of
prompt implementation.
o Category II -- Substantially documented and
su rtable. Recommendations in
this category may not be fully
-
rationalized or documented in the
Report, but all indications point
to the desirability nd with
defensibility of proceeding
their implementation.
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o Category III -- Potentially justifiable and
supportable. Recommendations in
this category, while meritorious,
are not regarded as fully supported
in the Report, due to time,
personnel resources, and other
constraints, but are deemed worthy
of further analysis to determine
? the full extent of their merit for
implementation.
These category descriptors do not take into account
political, social, or economic conditions which may alter
the supportability of these recommendations for
implementation. Accordingly, it is possible, by grouping
the recommendations along the above categories, to assess
more effectively the cost savings that can be expected.
This analysis permits summary estimates of: (1) firm, (2)
probable, and (3) potential savings.
The Report Recommendations -- An Assessment
above
Based
assessment
the following matrix:
Categorization of Savings
Category/3 Year Savings/
Revenue Opportunities
_
thousan s
I II III
INTERIOR 1-1: Place land sales $146,000(S) $900,000(R) $ --
revenues in the
General Fund
INTERIOR 1-2: Reexamine land
use planning
and sales regu-
lations
1/
INTERIOR 1-3: Implement AMP
INTERIOR 2-1: Evaluate the
transfer of
rangeland to
private owner-
ship
INTERIOR 2-2: Increase grazing
fees to FMV
1/
87,300(S)
19,500(R)
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Categorization of Savings
INTERIOR 2-3: Consolidate
Environmental
c Impact State-
ments
INTERIOR 2-4: BASE PILT on tax
equivalency
INTERIOR 3-1: Combine adminis-
trative func-
tions and
expand juris-
dictional
transfers
Office or Con-
cessioner Man-
agement
INTERIOR 4-1: Adopt pending 66,000(R)
legislation
INTERIOR 4-2: Accelerate and
expand revenue
actions
INTERIOR 4-3: Implement
administrative
management
techniques
INTERIOR 5-1: Improve conces-
sioner competi-
tion
INTERIOR 5-2: Strengthen the
INTERIOR 5-3:
INTERIOR 6-1:
Revenue opportunities
Category/3 Year Savings/
Adopt the Visitor 3,000(R)
Facility Fund
Bill
Coordinate and
consolidate
OCS permitting
INTERIOR 6-2: Abolish certain
reporting to
Congress
$ thousands
600(S)
1/
33,000(R)
3,476(S)
927(S)
$--
1/
1/
1,900(R)
1/
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Categorization of Savings .
Category/3 Year Savings/
Revenue Opportunities
thousands)
II III
!INTERIOR 6-3:
r
Eliminate Con-
gressional
approval of OCS
refunds
INTERIOR 6-4:
86(S) $
Modify production
rate setting
requirments
INTERIOR 7-1: Hold back final 3,300(S)
grant and con-
tract payments
INTERIOR 7-2: Enhance the
IG/MIS
INTERIOR 7-3: Fill the position (229)(S)
of Chief, Divi-
sion of Finan-
cial Assistance
INTERIOR 8-1: Implement a block
grant program
in FWS
INTERIOR 8-2: Review OSM block
grant program
INTERIOR 9-1: Test Use of TFCS 3,655(S)
for collection
of bonus
deposits
INTERIOR 9-2: Implement use of 15,278(S)
TFCS and lock
boxes for roy-
alty payments
INTERIOR 9-3: Collect AML and 2,903(S)
lottery fees
and rents
through TFCS
and lock boxes
.434(5)
1/
I l/
1/
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Categorization of Savings
Category/3 Year Savings/
Revenue Opportunities
(5 thousands)
I II
III
'INTERIOR 9-4: Enforce LOC
$
ulations
re
$1,494(S) $`
g
TOTAL COST SAVING(S)
CATEGORY 2/
172,401 9S 2,823
BY
TOTAL REVENUE
GENERATION
BY CATEGORY
(R)
69,000 $952,500
$1,900
1/
2/
Indicates a recommendation for which no dollar savings or
revenues are estimated.
Category totals are based on minimum estimated amounts
presented in the "Summary List of Recommendations and
Savings." If maximum amounts were used, the savings estimate
would increase by $60.1 million.
(R)=revenues; (S)=savings
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MEDIA SUMMARY
TASK FORCE REPORT FOR THE DEPARTMENT OF INTERIOR
Media Contacts:
Robert Hacking
Ernst & Whinney
[phone]
Department of Interior
Co-Chairs
George Anderson
Chief Executive Officer
Anderson, ZurMuehlen and
Company
Murray Sanders/Chris Tofalli Hays Watkins
The President's Private Sector Chairman and Chief
Survey on Cost Control Executive Officer
[phone] CSX Corporation
Morley Thompson
President
Baldwin-United Corporation
William Coleman, Esq.
O'Melveny and Myers
Project Manager
Robert Hacking
Ernst & Whinney
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#5C
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
(202) 466-5170
FEDERAL GOVERNMENT CAN SAVE AN ESTIMATED $20 BILLION OVER
THREE YEARS BY IMPROVING PROCUREMENT METHODS ACCORDING TO SURVEY
WASHINGTON, JUNE 3 -- The Federal Government can achieve
cost savings of $20.3 billion over three years by improving its
burdensome and costly procurement methods according to a Task
Force Report released by The President's Private Sector Survey on
Cost Control.
These recommendations will be considered on June 13th by a
Subcommittee of the Executive Committee chaired by J. Peter
Grace, chairman of W.R. Grace & Co., for possible submission to
the President.
The Procurement Task Force was co-chaired by Willard C.
Butcher, chairman of Chase Manhattan Bank of New York;; Edward S.
Finkelstein, chairman and chief executive officer of Macy's of
New York; and Clifton Garvin, chief executive officer of Exxon
Corporation of New York.
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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Included in the $20.3 billion three-year savings is a $3.4
billion savings for multi-year contracting (MYC). MYC is the
contracting for goods and/or services that take more than one
budget year to complete. MYC has been limited by:
o Complex budgetary procedures.
0 A contract cancellation recovery amount of $100
million.
o Congressional review of all MYC candidates.
o A restriction to "non-commercial items."
As it relates to the Department of Defense, only a few major
weapons systems have been approved for MYC. However, the Task
Force identified some thirty additional major weapons systems for
FY 1984 through FY 1988 meeting the MYC criteria and offering
annual cost savings of about $1.6 billion in the form of lower
weapons costs.
To realize these cost savings, the Task Force recommends
o MYC be expanded throughout the Federal Government.
o A focal point be established within the office of the
-2-
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Secretary of Defense to collect data and review,
advocate and monitor the MYC initiatives.
o Budget MYC procedures be simplified.
In addition to this central issue, the Procurement Task
Force recommends other cost saving opportunities totaling about
$16.9 billion over three years. These include better methods
for:
o Planning, contracting, managing, cost estimating and
scheduling for weapons acquisitions ($7.8 billion over
three years).
o Managing inventories by using economic order
quantities, obtaining better data by taking physical
inventories, and by improving base support services
($4.5 billion one time cost savings plus $1.6 billion
savings over three years).
0 Realizing increased efficiencies in procurement,
including separation of socio-economic programs from
procurement ($3 billion over three years).
Additionally, the Task Force urged the implementation of the
Uniform Federal Procurement System designed to unify Government
procurement policies and to streamline the process. It also
-3-
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proposed that the acquisition and distribution responsibilities
of the General Services Administration (GSA) be enhanced by
mandating that most civilian agencies utilize GSA.
Certain efficiency methods, such as expanding reliance on
the private sector for goods and services, implementing advances
in automated data processing, were also suggested by the Task
Force as cost savings methods.
"Of the three-year total of $20.3 billion in savings, $19.5
billion are fully substantiated by adequate documentation, and
another $.8 billion are partially substantiated," Mr. Grace said.
Mr. Grace cautioned that in all of the PPSSCC work,
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
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3B
P 4 t
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
REAGAN BUSINESS PANEL OUTLINES $2.4 BILLION IN SAVINGS
BY IMPROVING GOVERNMENT PROPERTY MANAGEMENT PROCEDURES
WASHINGTON, May 6--The President's Private Sector Survey
on Cost Control in the Federal Government (PPSSCC) today outlined
a three-year cost-savings plan totalling nearly $2.4 billion by
improving the government's procedures for managing its property.
These recommendations will be considered on May 17th by a
Subcommittee of the Executive Committee chaired by J. Peter Grace,
chairman of W. R. Grace & Co.,, 'for possible submission to the
President.
The Real Property Management Task Force was co-chaired by
Robert A. Georgine, president, Building and Construction Trades
Department, AFL-CIO, in Washington, D.C.; Alexander Giacco,
chairman, president and chief executive officer of Hercules
Incorporated of Wilmington, Delaware; Donald P. Kelly, president
and chief executive officer of Esmark, Inc. of Chicago; Donald B.
Marron, chairman and chief executive officer of Paine Webber
Jackson and Curtis of New York; and Nathan Shappell, chairman of
Shappell Industries of Beverly Hills, California.
(more)
1850 K Street, N.W. $ Suite 1150 ? Washington, D.C. 20006
[phone]
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A major problem addressed in the report was the Federal
Government's lack of cost-consciousness in regard to property
management functions, particularly in areas of energy-management,
processing of building leases, and maintenance of property.
Comparative costs in these areas of the government and the private
sector showed that the government consistently pays more for its
services.
The Task Force Report recommends the implementation of an
Energy Management Control System (EMCS) in order to minimize the
total energy usage by the government. The report also noted that
the General Services Administration's Public Building Service
(PBS) and the Department of Defense could take advantage of the
EMCS to immediately reduce their energy costs.
The report also notes that studies required to determine
the most cost effective methods are too rigid, and that managers
should be given more leeway in making such determinations without
incurring, the costs of formal studies.
The Task Force also determined that minimum-wage
requirements for Federal service contracts have seriously limited
cost-saving possibilities. Many wage scales under federal
janitorial service contracts are more than 20 percent above
commercial rates, because the established government rate
approaches the union rate for the area.
(more)
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"Of the three-year total of $2.4 billion in savings and
revenue enhancements, $2.3 billion is fully substantiated by
adequate documentation, and another $62 million is partially
substantiated," Mr. Grace said.
The Real Property Management Task Force also made an
additional $231 million in cash acceleration recommendations,
which would result from the quick disposal of excess government
property.
Mr. Grace cautioned that in all of the PPSSCC work,
estimated savings and revenue enhancements are more of a
"planning" quality and not of a precise "budget" quality.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
Sy Pranger
Greenbelt, MD
[phone]
Jim DiClerico/Murray Sanders
The President's Private Sector
Survey on Cost Control.
[phone]
TASK FORCE REVIEWING PERSONNEL REVEALS NEARLY $40 BILLION
WORTH OF SAVINGS POTENTIAL
WASHINGTON, April 5 -- The President's Private Sector Survey
on Cost Control in the Federal Government (PPSSCC) today made public a
task force report focusing on Personnel Management containing proposed
cost savings, over three years, of nearly $40 billion. These
recommendation will be considered on April 15th by a Subcommittee of
the Survey's Executive Committee chaired by J. Peter Grace, chairman
of W. R. Grace & Co. of New York, for possible submission to the
President.
The PPSSCC Personnel Management Task Force was co-chaired by
Robert Hatfield, president of New York Hospital; Donald Keough,
president of Coca-Cola Company of Atlanta; and John A. :Puelicher,
chairman and chief executive officer of Marshall and Ilsely Corp. of
Milwaukee.
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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"Of the three-year total of almost $40 billion of
recommended savings, $35 billion are fully supported by adequate
documentation and another $3.5 billion are partially supported," Mr.
Grace said. He also noted that $10.5 billion in savings over a
three-year period require further study.
Mr. Grace cautioned that in all of the PPSSCC work estimated
savings are more of a "planning" quality and not of a precise "budget"
quality.
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 Contacts:
Murray Sanders/Chris Tofalli
The President's Private Sector
- Survey on Cost Control
[phone]
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#5A
-~?- - ~ -, THE PRESIDEN VS Pk VA Z SECd OR SURVEY ON COST CONTROL
tit
PRESIDENTIAL ADVISORY PANEL RECOMMENDS FUNDAMENTAL
CHANGES IN THE FEDERAL MANAGEMENT SYSTEM
WASHINGTON, June 3--Citing serious structural and procedural
problems in Executive Branch management processes, organization,
information flow, budgeting, planning, and evaluation procedures,
the President's Private Sector Survey on Cost Control (PPSSCC)
today recommended fundamental changes in the management of the
Executive Branch.
Noting that the need for effective management in the Federal
Government is dramatized by its sheer size and complexity --
Federal outlays exceed $800 billion and cash flow exceeds $1.5
trillion annually -- the Task Force recommends that an office of
Federal Management (OFM) be established in the Executive Office
of the President. This newly created office will be responsible
for the budget process and assume a strong management role in
finance, human resources, administrative services, and management
improvements.
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
(202) 4fi6-117Q
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These recommendations will be considered on June 13th by a
Subcommittee of the Executive Committee chaired by J. Peter
Grace, Chairman of W. R. Grace & Co., for possible submission to
the President.
The Federal Management Systems Task Force was
co-chaired by Joseph Connor, senior partner of Price Waterhouse
of New York; Harry E. Figgie, chairman and chief executive
officer of Figgie International, Inc. of Willoughby, Ohio; John
E. Fisher, chairman of Nationwide Insurance Co. of Columbus,
Ohio; Dan W. Lufkin, chairman of the finance committee of
Columbia Pictures Industries, Inc. of New York; and J. Paul
Sticht, chairman of R. J. Reynolds Industries, Inc. of Winston-
Salem, North Carolina.
Presently, responsibilities for developing and implementing
administrative processes across Government agencies are not
clearly assigned. For example, three agencies -- the office of
Management and Budget, the Office of Personnel Management, and
the General Services Administration -- are responsible for
personnel, financial management, budget, property, and other
administrative functions. Duplications, conflicts, and blurred
lines of authority among the various units in the Executive
Branch abound, resulting in inconsistent application of policies,
major gaps, and the development of inadequate and costly
mangement systems.
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Significantly, there is also an, absence of direction and
coordination in key areas. For example, even though Federal
outlays exceed $800 billion and cash flow exceeds $1.5 trillion a
year, no agency is accountable for developing and coordinating
financial management policies. This has led to significant
difficulties in establishing and executing effective procedures
for cash management, debt and receivable collections, inventory,
and other asset management and financial reporting. Within the
newly-created OFM, the Task Force recommends a Chief Financial
Officer to direct and coordinate the Federal Government's
accounting and financial reporting activities. This function
would consolidate the accounting and reporting activities of the
Treasury Department, OMB, and GSA. Under the new system, GSA and
OPM would report directly to the new OFM for policy direction.
Because of the rapid turnover of key executives, a condition
endemic to the political process, government functions lack
continuity of management. Key appointed positions turn over
every 18 to 24 months. It is not possible to implement and
sustain meaningful management improvement in an environment
characterized by persistent changes in management. The Task
Force proposes that key OFM officials be appointed on a long-term
basis and have strong mangement backgrounds. it further
recommends a new "contractual" approach for the second tier of
OFM officials to increase the potential for management: continuity
and to attract and retain qualified individuals.
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The Task Force found that in virtually all administrative
areas -- payroll, personnel, accounting, and asset management for
example -- agencies have developed independent information
systems and related procedures, taking little advantage of the
experience and work of other departments and agencies. Current
methods of development and operation are inefficient, often
counter-productive, and very costly. This has resulted in the
lack of common or compatible data across departments and
agencies, leaving the senior levels of Government without timely,
compatible, and accurate management information. The Task Force
recommends that OFM direct the replacement of agency-unique
automated adminstrative systems with common systems.
With regard to improving the budget and planning process,
the Task Force recommends, for a more efficient and effective
process, the adoption of a new government-wide capital budgeting
system, strengthening the budget process to enhance its
capability to improve government-wide management, conducting more
vigorous and systematic evaluation of Federal programs and
studying the feasibility of adopting a biennial budget process to
provide more consideraion of long-term management needs.
As opposed to other PPSSCC Task Force Reports, which include
savings estimates, savings in this Report are not quantified,
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since the Report recommendations are directed at establishing the
necessary strategy, structure, systems, and people to "fix" the
causes of many of the problems cited in other Task Force Reports.
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B
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
NAVY DEPARTMENT CAN YIELD $7.2 BILLION IN SAVINGS OVER
THREE YEARS ACCORDING TO PRESIDENTIAL PANEL
WASHINGTON, June 30--By improving its weapons system
acquisition processes and management of its supply and inventory,
the Department of the Navy can achieve cost savings of more than
$7 billion over three years, without diminishment of the defense
program, according to a report released today by the President's
Privdte Sector Survey on Cost.Control in the Federal Government
(PPSSCC).
Although some of the recommendations would take several
years for full savings to be realized, nearly all of them could
be implemented under the existing authority of the Department of
the Navy. In addition to identifying areas for potential
savings, the task force has identified numerous opportunities for
increasing operating efficiency where savings cannot be
specifically quantified.
These recommendations will be considered on July 13th by
a Subcommittee of the Executive Committee chaired by J. Peter
Grace, chairman of W. R. Grace & Co., for possible submission to
the President.
(more)
1850 K Street, N.W. ? Suite 1150 S Washington, D.C. 20006
[phone]
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The Department of the Navy task force was co-chaired by
Nicholas T. Camicia, chairman and chief executive officer of The
Pittston Company of Greenwich, Connecticut; Maurice R. Greenberg,
president and chief executive officer of American International
Group, Inc. of New York; Stanley Hiller, chairman of Hiller
Investment of Menlo Park, California; and Thomas M. Macioce,
president and chief executive officer of Allied Stores of New
York.
To improve the weapons acquisition process, the report
recommends installing a system of dual sourcing--maintaining at
least two competitive sources during the entire production life
of the weapons systems programs.
Acknowledging complexities involved in establishing dual
sourcing, the report notes that the Office of the Secretary of
Defense should provide program managers with detailed guidance on
how to select dual source candidates and prepare the necessary
cost analysis.
The report also notes that the Secretary of the Navy
should conduct a "rigorous" review of current development
contracts with a view to increasing competition during the
production phase and that the Secretary require all future
programs to undergo a dual-sourcing analysis as part of a program
acquisition strategy and again prior to each major decision.
With regard to improving productivity of contractors of
major weapons systems, the report fully supports the Department
(more)
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of Defense Industrial Modernization Incentives Program (IMIP),
which is designed to encourage "increased contractor capital
investment to enhance productivity." In addition, the report
recommends adopting various private-sector cost accounting
standards to determine the service life of an asset and its
depreciation.
The report also outlined deficiencies in the Navy's
supply and storage operations, particularly noting, for example,
that more than a $125 million inventory of spare parts stowed
aboard a carrier is managed by personnel using often obsolete
computers. Onboard physical distribution systems frequently
malfunction, causing seamen to have to perform distribution
functions that are performed much more efficiently when automated.
Inventory control problems were also identified at Navy
Supply Centers which have poor security, receiving, and shipping
procedures. The two major Navy Inventory Control Points, with
ship and aviation parts, operate with 15-year old computer
systems which are out of date and incapable of supporting their
critical operations.
To alleviate some of these problems, the PPSSCC task
force recommended that the Navy should intensify its efforts to
modernize inventory management-related computers. It also
questioned whether brief two-year tours of duty are adequate for
officers who must manage these complex operations.
(more)
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Specific inventory improvement procedures recommended by
the task force include: employment of word processors and other
modern equipment at Inventory Control Points, including those on
aircraft carriers, to improve categorizing and record
maintenance; improvement of security at Navy Supply Centers; and
establishment a task force of line and staff officers to analyze
the staffing and operations of a recent-class carrier to
determine productivity, work pace, and comparative on-board work.
Increased use of multi-year procurement, as endorsed by
the Secretary of Defense, should also be utilized. This would
improve efficiencies in production processes and reduce the
administrative burden of contracts.
To improve management practices in the Navy, the report
recommends that the Office of the Secretary of Defense take steps
to stabilize the Planning, Programming and Budgeting (PPB)
process to maintain the integrity of plans and programs and the
costs associated with them. Frequent revisions in guidance for
planning and budgeting phases result in massive expenditures of
staff effort to cope with the changes and, when the changes have
programmatic effects, in disruption of delicately constructed
balances among mission areas, readiness versus investment, and
other important priorities. To increase the benefits to the Navy
of the skills available from its most capable officers and
enlisted personnel, the report recommends that a screening board
be formed to conduct annual high potential assessments to select
a pool of officers for special career management. The report
(more)
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also recommends that the Navy consider extending the tours of
duty of high potential officers and enlisted personnel by one
year.
"Of the three-year total of $7.2 billion in savings and
revenue generation, $7.0 billion are fully substantiated by
adequate documentation, and another $.2 billion are partially
substantiated," Mr. Grace said.
Mr. Grace cautioned that in all of the PPSSCC work,
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT ON THE DEPARTMENT OF THE NAVY
Media Contacts:
Ronald K. Shelp
American International
Group, Inc.
[phone]
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
The Department of the Navy
Task Force Co-Chairs
Nicholas T. Camicia
Chairman & CEO
The Pittston Co.
Thomas M. Macioce
President & CEO
Allied Stores
Maurice R. Greenberg
President & CEO
American International
Group, Inc.
Stanley Hiller, Jr.
Chairman
Hiller Investment
Project Manager
Bob Cockrill
Coopers & Lybrand
THE REPORT RECOMMENDATIONS -- A PERSPECTIVE
As the product of an unprecendented and wide-ranging
survey performed by private sector executives and
specialists, the recommendations in this Task Force report
must be placed in perspective. Our volunteer staff had
the formidable task of bringing their expertise to bear on
complex Federal operations in the short span of a few
months while holding down other full or part-time
employment.
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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Despite these challenges -- most of which were antici-
pated at the outset -- valuable analysis and issue develop-
ment were achieved. The recommendations contained in this
report will result, if implemented. in real and significant
savings and other benefits to American taxpayers whose hard
work and personal sacrifices financially support these
Federal programs and operations.
We believe that the majority of our recommendations
are fully substantiated. However, it would be misleading
to allege that each and every recommendation is rooted in a
uniformly high level of research, analysis and substantia-
tion. Various time limitations, business resources, and
other constraints did not permit achievement of the desired
uniformity objective.
We have evaluated, therefore, the "supportability'" of
the recommendations on their management merits and have
grouped them into the following three categories.
o Category I -- Fully substantiated and defensible.
Recommendations in this category are,
in the opinion of the Task Force,
convincing and deserving of prompt
implementation.
o Category Ii -- Substantial) documented and su ort-
able. Recommendations in this cate-
gory may not be fully rationalized or
documented in the report, but all
indications point to the desirability
and defensibility of proceeding with
their implementation.
o Category III -- Potentially justifiable and support-
able. Recommendations In this cate-
.gory, while meritorious, are not
regarded as fully supported in the
report, due to time, personnel
resources, and other constraints, but
are deemed worthy of further analysis
to determine the full extent of their
merit.
These category descriptions do not take into account
political, social or economic conditions which may alter the
supportability of these recommendations for implementation.
Accordingly, it is possible, by grouping the recommendations
along the above categories, to assess more effectively the
cost savings that can be expected. This analysis permits
summary estimates of firm, probable and potential savings.
The Report Recommendations -- An Assessment
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in
the matrix on the following page.
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7 C
gyp.
WE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTI
Contacts:
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
REAGAN BUSINESS PANEL OUTLINES EFFICIENCY RECOMMENDATIONS
TO SAVE $5.9 BILLION IN GOVERNMENT PUBLIC ASSISTANCE PROGRAMS
WASHINGTON, May 16--The President's Private Sector
Survey on Cost Control in the Federal Government (PPSSCC) today
issued a task force report--Low Income Standards-.-which
outlined methods for the Federal Government to more efficiently
run its public assistance programs and save approximately $5.9
billion over a three-year period.
These recommendations will be considered on May 26th
by a Subcommittee of the Executive Committee chaired by
J. Peter Grace, chairman of W. R. Grace & Co., for possible
submission to the President.
The Low Income Standards Task Force was co-chaired by
Bennett Archambault, chief executive officer of Stewart-Warner
Corporation of Chicago; Richard J. Flamson, chairman and chief
executive officer of Security Pacific National Bank of Los
Angeles; Robert A. Schoellhorn, chairman and chief executive
officer of Abbott Laboratories of North Chicago, Illinois; and
Robert K. Wilmouth, president and chief executive officer of
the National Futures Association of Chicago.
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
The task force report has recommended that various
public assistance agencies standardize and target available
data on recipients, promote automation and require states to
adhere to specific guidelines. It also proposed that Congress
allow more simplified administration of these programs by
consolidating administration and releasing recipient data.
The report notes that implementation of these
recommendations will lead to reductions in state administration
costs and, therefore, a reduction in the Federal cost of
reimbursement. The Low income Standards Task Force studied
various public assistance programs, including the Medicaid
program, Aid to Families with Dependent Children (AFDC),
Low-Rent Public Housing, and Child Nutrition.
Citing that many needs-based programs have become
overly complex and perform distinct but overlapping functions,
which in turn enlarges the bureaucracy at the state and local
levels as well as the Federal level, the report recommends
installing an effective method for coordinating the separate
parts to better meet people's basic needs.
In order to avoid duplicative services, the Task
Force proposes establishment of a combined funding system for
covering the Federal portion of the cost of administering AFDC,
Medicaid and Food Stamps. This new system would combine Federal
funding for administrative costs under a single block grant and
was submitted to Congress in 1982.
(more)
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
- 3 -
In addition to supporting the establishment of the
CWA, the report also recommends developing a procedure to
adjust the amount of the state grant by the size of the
anticipated caseloads for AFDC, Medicaid and Food Stamps, and
by recognizing cost level increases. This would also create
incentives for states to reduce administrative costs, which are
presently reimbursed on a 50 percent matching basis.
The task force report also proposed establishing an
income verification system through computer matching. Because
of various restrictions by law, the report favors amending the
Tax Reform Act of 1976 to allow individual needs-based programs
to gain access to Internal Revenue Service and Social Security
Administration data.
A recommendation was also included to improve methods
of distributing Medicaid payments. In-patient hospital
services and long-term care, which represent a major portion of
Medicaid expenditures, can be improved by replacing
retrospective reimbursement systems--paying all or a portion of
the hospital charges automatically--with a prospective payment
system--fixed negotiated limits on reimbursement.
"Of the three-year total of $5.9 billion in savings
$4.2 billion is fully substantiated by adequate documentation,
and another $1.7 billion is partially substantiated," Mr. Grace
said.
Mr. Grace cautioned that in all of the PPSSCC work,
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
THE PRESIDENT'S PRIVATE SEC-100J. .URYF 0;; COST CO!
?1.
MEDIA SUMMARY
TASK FORCE REPORT ON LOW INCOME STANDARDS AND BENEFITS (LISAB)
Media Contacts:
Richard Strauss
Stewart Warner Corporation
[phone]
Murray Sanders/Chris
Tofalli
The President's Private
Sector Survey on Cost
Control
[phone]
Low Income Standards/Benefits
Task Force Co-Chairs
Bennett Archam:bault
Chief Executive Officer
Stewart-Warner Corporation
Richard J. Flamson
Chairman & CEO
Security Pacific National Bank
Robert A. Schoellhorn
Chairman & Chief Executive Offic(
Abbott Laboratories
Robert K. Wilmouth
President & Chief Executive Offic
National Futures Association
Project Manager
Richard Strauss
Stewart Warner Corporation
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
It is vitally important that the recommendations in
this Task Force Report be placed in perspective. They are
the product of an unprecedented and wide-ranging survey
that was performed in a politically-charged atmosphere by
private sector executives and specialists whose services
were volunteered -- often on a part-time basis. This
staff had the formidable task of using their expertise to
focus on largely unfamiliar and complex Federal operations
in the short span of only a few months. Frequently, staff
members expended these efforts while holding down other
full or part-time employment.
Despite these difficult and perplexing challenges --
all of which were expected at the start of the Task Force
Report -- a great deal of valuable work was performed.
The recommendations contained in this Report will result,
if implemented, in real and significant savings and other
benefits to-American taxpayers whose hard work and
personal sacrifices foot the bill for these Federal pro-
grams and operations.
We have sought to be realistic about the recom-
mendations reported. The great majority of them, we
believe, are fully substantiated. However, it would be
misleading for us to leave the impression that each and
every recommendation is rooted in a comprehensive level of
research, analysis, and substantiation. The pressure of
time, other business commitments, lack of adequate
resources, and other constraints did not always permit the
luxury of achieving the desired thoroughness of study.
To promote a realistic expectation of recommendations
reported, we have evaluated the "supportability" of the
recommendations on their management merits and have
grouped them into three categories.
0 Category
Fully substantiated and
defensible. Recommendations in
this category are, in the
opinion of the Task Force,
convincing and deserving of
prompt implementation.
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REPORT RECOMMENDATIONS -- AN ASSESSMENT
Category/3-Year. Savings
__Issue/Recommendations
I
($ millions)
II
III
LISAB 1: Enact a revised
Combined Welfare Admin-
istration proposal
$ 929
LISAB 2: Enact a revised
Energy and Emergency
Assistance proposal
290
LISAB 3: Merge Federal
weatherization activities
N/A 1
LISAB 4: Require quarterly
State wage reporting,
release IRS data, and
conduct computer match-
ing verification
LISAB 5: Accelerate efforts
toward automation.
LISAB 6: States adopt ADP
systems
LISAB 7: Modify the SSI
verification procedures
and redetermination process
LISAB 8: Establish a prospec-
tive Medicaid payment system
and require prescreening
and case management in
community-based programs.
LISAB 9: Replace the Medi-
caid Quality Control
disallowance system.
Sub Total
Less: Overlap in Issues
4, 5 and 72/
Grand Total
$2,227
$2,925
N/A
$79
$1,031
N/A
J4,117
$33 215
($1.546)
$4,187
$14669
$29.1
N/A - Not Applicable
?The estimates overlap in issues 4, 5 and 7, and cannot
~be allocated to each issue. The total amount of the
overlap is judged to fall within the definition of
Category II and it is shown there.
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
Category 11 -- Substantially documented and
supportable. Recommendations
in this category may not be
fully rationalized or docu-
mented in the Report, but all
indications point to the desir-
ability and defensibility of
proceeding with their imple-
mentation.
o Category III -- Potentially justifiable and
supportable. Recommendations
in this category, while meri-
torious, are not regarded as
fully supported in the Report,
due to time, personnel
resources, and other con-
straints, but are deemed worthy
of further analysis to deter-
mine the full extent of their
merit for implementation.
These category descriptors do not take into account
political, social or economic conditions which may alter
the supportability of these recommendations for imple-
mentation. Accordingly, it is possible, by grouping the
recommendations in the above categories, to assess more
effectively the cost savings that can be expected. This
analysis permits summary estimates of firm, probable, and
potential savings.
THE REPORT RECOMMENDATIONS -- AN ASSESSMENT
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in
the matrix on the following page.
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 rE E,kEsu ::.: JT'S ?RiVAW 3R SURVEY ON COST CONTROL
Contacts:
Lona Jupiter
Wells Fargo Bank
(415) 396-3606
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
BUSINESS GROUP SUGGESTS UP TO $3.2 BILLION IN SAVINGS
AND REVENUE GENERATION OVER 3 YEARS FOR HUD
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WASHINGTON, April 18--The Department of Housing and
Urban Development (HUD) can save up to $3.2 billion over a
three-year period if the suggestions by the President's Private
Sector Survey on Cost Control in the Federal Government (PPSSCC),
which were released today, are adopted. This figure includes
potential revenue generation of more than $870 million.
These recommendations will be considered on May 2nd by
a Subcommittee of the Executive Committee chaired by J. Peter
Grace, chairman of W. R. Grace & Co. of New York, for possible
submission to the President.
The HUD Task Force was co-chaired by Frank Cary,
chairman of the board of IBM Corporation of Armonk, New York;
Richard Cooley, chairman and chief executive officer of Wells
Fargo Bank of Los Angeles; and Barry F. Sullivan, chairman and
chief executive officer of the First National Bank of Chicago.
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
The report recommends that cash management systems
should be implemented to optimize investment opportunities;
automate, organize and administer debt collection procedures; and
correct deficiencies in the present system which slow the
acquisition, management, and disposition of real estate.
Suggestions for improving the handling of HUD real
estate were made, which include monitoring and expediting
foreclosures; enacting the IRS code relative to cash accounting
and use of depreciation; and expediting the acquisition of
properties for foreclosures. The report also suggests that the
equivalent of a chief financial officer be established, which
would help correct the lack or inadequacy of financial
management in HUD.
In addition to the savings and revenue enhancements
suggested by the PPSSCC task force, a recommendation was also
made to implement a computer-matching program for eligibility
verifications. While this requires an outlay of money, significant
savings will be realized over a two to five-year period.
"Of the three-year total of $3.2 billion in savings and
revenue enhancements, $2.7 billion are fully supported by
adequate documentation, and another $479 million are partially
supported," Mr. Grace said. Mr. Grace also said another $308
million in savings and revenue generation over a three-year
period is recommended for further study.
Mr. Grace cautioned that in all of the PPSSCC work
estimated savings and revenue enhancements are more of a
"planning" quality and not of a precise "budget" quality.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT FOR THE DEPARTMENT
OF HOUSING AND URBAN DEVELOPMENT
Media Contacts:
Lona Jupiter
Wells Fargo Bank
San Francisco, CA
[phone]
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
Dept. of Housing and Urban
Development Co-Chairs
Frank Cary
Chairman of the Board
IBM Corporation
Richard Cooley
President, Chairman and Chief
Executive Officer
Seattle First National Bank
Barry F. Sullivan
Chairman & Chief Executive
Officer
First National Bank of Chicago
Project Manager
Richard Borda
Wells Fargo Bank
THE REPORT RECOMMENDATIONS -- A PERSPECTIVE
It is vitally important that the recommendartsioTheynare
this Task Force Report be placed in perspective.
the product of an unprecedented and wide-ranging survey
that was performed in a politically-charged atmosphere by
private sector executives and specialistssihose servicesf
were volunteered--often on a p
had the formidable task of bringing their expertise to bear
the
on largely unfamiliar nthscomFrequentlyaltheseaeffortsnwere
short span of a few mo
expended while holding down other full- or part-time
employment.
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
(702) 466?-5170
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
se difficult and perplexing challenges--all
Despite the - rest de-l of
of which were anticipated at Tthe on he recommendations contained
valuable work was performed-
in this Report. if implemented, will result in real and
pebenefits rsonal sacrificesnfoot the
significant savings and other
taxpayers whose hard work and bill for these Federal programs and operations. about the We have sought to be realistmajority of them, we
recommendations reported. The great
believe, are fully substantiated. However, it would be
of
misleading for us to leave the in ima pression n that high each and
every recommendation is rooted le timel
research, analysis, and substantiation. The press
other business commitments, lack of ad quatelresour es, and
other constraints did not alys permit
achieving this desired uniformity.
and to promote a realistic expectation of
As a result,
recommendation reported, we have evaluated the
"supportability" of the recommendations their
merits and have grouped tm s.
o Category I - Full substantiated and defensible.
Recommendations in this category are,
in the opinion of the Task Force,
convincing and deserving of prompt
implementation.
o Category II - Substantially documented and
supportable.
Recommendations in this category may
not be fully rationalized or documented
in the Report, but all indications point
to the desirability and defensibility of
proceeding with their implementation.
o Category III - Potentially justifiable and
supportable. while
Recommendations in this category,
meritorious, are not regarded as fully
supported in the Report, due to time,
personnel resources, and other
constraints, but are deemed worthy of
further analysis to determine the full
extent of their merit for
implementation.
These category descriptors do not take into account
political, social, or economic conditions which may alter
the supportability of these recommendations for grouping
implementation. Accordingly, it is possible, by grouP
the recommendations along the above categories, to assess
more effectively the cost savings
estimatescof:~(1)pfirma. (2)
This analysis permits summary
probable, and (3) potential savings.
The Report Recommendations -- An Assessment
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in
the follnwing mr:.
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
THE REPORT RECOMMENDATIONS
AN ASSESSMENT
Category/3-Year Savings/Revenue opportunities
($ millions)
I II III
HUD 1-1 Establish the Office of N/Q N/Q N/Q
Assistant Secretary For
Financial Management
HUD 1-2.1 (See HUD 2-1 through HUD 2-4)
HUD 1-2.2 (See HUD 2-1 through HUD 2-4)
HUD 1-2.3 Implement standard account- 79.4(R)
ing practices for principal
and interest payments on
Title I loans
HUD 1-2.4
HUD 1-2.5
HUD 1-2.6
HUD 1-2.7
HUD 1-2.8
HUD 2-1 -
HUD 2-4
HUD 2-5
HUD 2-6
HUD 2-7
Improve investment port- 198.6(R)
folio management N/Q N/Q
Establish actuarial review N/Q
process of FHA funds
Eliminate distributive 185.4(S)
shares program
Centralize bond bidding
rocedures
p
Improve cash management 72.8(R)
procedures
36.4(S)
Improve organization, admini- 21(S)
stration, and automation
Modify Time Reporting System 13.0(S)
Implement micrographics 30.0(S)
system
Centralize publications 5.0(S)
inventory
HUD 3-1 &
HUD 3-2 Automate, organize, and
administer debt collection
HUD 3-3 Contract out charged-off 21.4(R)
accounts to collection
agency
HUD 3-4 Expand third-party 158.3(R)
servicing
285.9 (R)
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Category/3-Year Savings/Revenue Opportunities
HUD 4-1 Improve rehabilitation 13.2(R)
and sale program
BUD 4-2 Improve management and N/Q bI/Q N/Q
administration of property
disposition
HUD 4-3 Monitor and expedite 34.9(S)
foreclosures
HUD 4-4 Improve property appraisal 9.9(R)
methods
HUD 4-5 Expedite acquisition of 34.9(S)
property by foreclosure
HUD 4-6 Amend IRS code 15(R)
HUD 4-7 Implement year-round 115.9(R)
disposition program N/Q N/Q
HUD 4-8 Modify MIDLIS status codes N/Q
HUD 4-9 Review and modify N/Q N/Q N/Q
disposition regulations
HUD 4-10 Utilize outside attorneys 18.1(S)
to expedite foreclosures
HUD 5-1 Implement computer- 1,870.2(S)*
matching program for
eligibility verification N/Q
HUD 5-2 Improve training for N/Q N/Q
application processing N/Q N/Q
HUD 5-3 Improve monitoring for N/Q
compliance
HUD 6-1 Sell mortgages to the Federal 109.2(R)
Financing Bank
HUD 6-2 Establish Mortgage N/Q N/Q N/Q
Disposition Board
HUD 7-1 to 89.3(S)
HUD 7-6 Improve management of multi-
family housing
HUD 7-7 Design analytical model for N/Q N/Q N/Q
loan services
* Indicates funds which could be
made available for proper allocation
to qualified recipients for
HUD benefits
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Category/3-Year Savings/Revenue Opportunities
BUD 8-1 &
HUD 8-2
Improve management of PHAs
I
II
III
82.8(S)
HUD 8-3
Incorporate the FMR into
N/Q
N/Q
N/Q
the PHA Funding Formula
N/
N/Q
N/Q
HUD 8-4
HUD 9-1
Improve PHA staff skills
Implement cost/benefit
Q
0
0
0
HUD 9-2
analysis of Lump Sum
Monitor Lump Sum accounts
0
Cl
0
0
HUD 9-3
Train personnel in Lump
0
0
HUD 10
Sum issues
Increase fees for single
21.6(R)
ools
GNMA
il
p
y
fam
_
Total Cost Savings (S) by $2,173.4 $164.8 $82.8
Category
Total Revenue (R) by Category 562.0 314.1 225.1
* Indicates funds which could
be made available for proper
allocation to qualified
recipients
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#3C
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
John Ward
Meldisco
[phone]
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
PRESIDENTIAL COST CONTROL PANEL RECOMMENDS
$3.7 BILLION IN SAVINGS FOR DEPARTMENT OF LABOR
WASHINGTON, May 6--A cost savings potential of
approximately $3.7 billion is possible at the Department of
Labor, over a three-year period, according to a Task Force
report issued today by the President's Private Sector Survey on
Cost Control in the Federal" Government (PPSSCC). These
recommendations will be considered on May 17th by a
Subcommittee of the Executive Committee chaired by J. Peter
Grace, chairman of W. R. Grace & Co., for possible submission
to the President.
The PPSSCC Labor Task Force was co-chaired by James
Kemper, Jr., chairman of Kemper Corporation of Long Grove,
Illinois; Francis C. Rooney, chief executive officer of
Melville Corporation of Harrison, New York; Richard R. Shinn,
chairman and chief executive officer of metropolitan Life
Insurance Co.; and Luke G. Williams, chief executive officer of
American Sign and Indicator Company of Spokane, Washington.
(more)
1850 K Street, N.W. 9 Suite 1150 a Washington, D.C. 20C06
[phone]
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MATRIX OF RECOMMENDATIONS
Issue/recommendations
Integrate environmental reviews
Revise no regulations for EIS
tt ntives
e
CONST 1:
CONST 2:
CONST 3:
CONST 4:
CONST 5:
CONST 6:
CONST 7:
CONST 8:
CONST 9:
CONST 10:
CONST 11:
CONST 12:
CONST 13:
CONST 14:
CONST 15:
CONST 16:
CONST 17:
CONST 18:
CONST 19:
CONST 20:
3-year savings
By Degree of Certainty
(S) Savings
(0) One-Time Cost Savings
(S millions)
338.9 (S) $ 33.2 (S) $
a
Increase use of NEPA categorical
exclusion
Restrict EIS reviews
Restrict mitigation outlays
Modify treatment of wetlands
Stop implementation of new
fish and wildlife rules
Eliminate duplicative historic
preservation regulations
Repeal section 4(!) of the
Department of Transportation Act
Revise floodplain requirements
Amend Safe Drinking Water Act
Combine endangered species
consultation with NEPA review
Use innovative methods to
mitigate highway noise
Change dredged material
disposal policies
Amend section 404 of the
Clean Water Act
Amend Wild and Scenic Rivers Act
Revise and enforce OMB Circular
A-76 and increase contracting out
Increase use of performance
specifications
Increase the application of
value engineering
Improve effectiveness of on-site
management presence in EPA
Construction Grants Program
CONST 21: Improve construction project
and program.management
Encourage privatisation of
wastewater treatment facilities
Improve data bases and
enforce life cycle costing
requirements
24.9 (S)
16.6 (S)
132.4 (S)
25.2 (3)
18.6 (S)
1.6 (3)
19.9 (S)
2.0 (S)
703.3 (S)
215.2 (S)
359.0 (0)
143.0 (S)
1.324.0 (S)
662.0 (S)
0.0 (S)
286.5 (S)
0.0 (S)
0.0 (S)
$613.3 (S) $1.140.0 (s)' $3,3160-5
359.0 (0)
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-2-
The Labor Task Force studied specific areas for
possible savings, including abuse in Federal disability
programs, the current salary scales as compared with local wage
earners, and internal administrative procedures.
The Task Force recommended establishing a permanent
investigative organization in order to properly control the
payment of legitimate long-term disability claims. The report
cited that the government's automated data processing systems
and investigative capabilities have not kept pace with the
massive increases over the past 10-15 years of long-term injury
claimants.
Also recommended by the Labor Task Force is the
establishment of area wage scales for white-collar employees,
rather than the national pay system presently utilized, which
has no provision for variations in pay rates based on local
salary conditions. There would also be a city-by-city salary
scale for non-supervisory positions.
With regard to various wage laws and regulations, the
Task Force recommended amending the Davis Bacon Act in order to
increase the competitiveness of local contractors. This could
be accomplished, in part, by raising the contract threshold
from $2,000 to at least $25,000 and including a greater
percentage of local rates in the determination of the
"prevailing wage." It also recommended amending the Walsh
Healey Act in order to eliminate the 8-hour per day threshold
from overtime pay requirements in recognition of developing
alternative work schedules (e.g., the four day, 40 hour week).
(more)
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-3-
The report also recommended internal administrative
improvements, such as developing standards for measuring
productivity. This also requires establishing objectives for
productivity improvement and providing rewards and incentives
for meeting or exceeding standards.
"Of the three-year total of $3.7 billion in savings,
$1.5 billion are fully substantiated by adequate documentation,
and another $2.2 billion are partially substantiated," Mr.
Grace said.
Mr. Grace cautioned that in all of the PPSSCC work
estimated savings and revenue enhancements are more of a
"planning" quality and not of a precise "budget" quality.
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I
THE PRESIDENTS PRIVATE SECTOR SURVEY ON COST CONTROL
CONTACTS:
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
JUSTICE DEPARTMENT COULD RAISE OTHAN $625 BY
IMPROVING DEBT COLLECTION WASHINGTON, June 30--A uniform debt-reporting system
needs to be implemented by the Department of Justice (DOJ) in
order to improve its collection procedures and to reduce its
present backlog of cases, with the potential of raising more than
$625 million over a three-year period. This is one of 37.
proposed recommendations made by the President's Private Sector
Survey on Cost Control in the Federal Government (PPSSCC) in a
report on the Justice Department.
These recommendations will be considered on July 13th by
a Subcommittee of the Executive Committee chaired by J. Peter
Grace, chairman of W. R. Grace & Co., for possible submission to
the President.
The Department of Justice Task Force was co-chaired by
Weston R. Christopherson, chairman and chief executive officer of
Jewel Companies, Inc. of Chicago; Frederick Deane, chairman and
chief executive officer of the Bank of Virginia of Richmond;
Jewel S. Lafontant, senior partner of Lafontant, Wilkins, Jones
and Ware of Chicago; and Arthur Levitt, Jr. chairman of the
American Stock Exchange in New York.
(more)
1850 K Street. N.W. ? Suite 1150 ? Washington, D.C. 20006
(2021466-5170
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-2-
The report cites a lack of uniformity in claims
originating in other agencies--98.8 percent of claims requiring
legal action by the Justice Department originate in other Federal
agencies--and notes that this arises from a decentralized
collection and credit process, in which each agency establishes
credit policies and procedures to serve its own particular
purpose.
The task force recommends that the Justice Department
should require and, under Office of Management and Budget (OMB)
guidance, client agencies should adopt a uniform reporting system
for claims that are to be forwarded for legal action. To help
facilitate this process, a Special Assistant U.S. Attorney in
charge of debt collection should be named, who would be
responsible for coordinating debt collection from other agencies
requiring Justice Department litigation.
The DO3 task force found many collection offices
seriously understaffed, with personnel often untrained and
inexperienced in modern collection methods. Highlighting the
problem was an example from an OMB study in which an office with
more than 1,200 referred accounts had only one permanent position
allocated to collections. Similar situations were found in other
offices.
The task force therefore recommended that consideration
be given to using private collection agencies under contract to.
aid in the collection of the outstanding receivable balance.
Given DOJ's current staffing levels, private agencies can provide
immediate collection activity with one private collection agency
indicating that it collects between 60 and 75 percent of the
dollar value of cases assigned to it.
tmore)
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With regard to assets which are obtained by the
government through seizure and forfeiture, the report recommends
developing a procedural guide which provides a systematic
checklist for processing forfeiture cases and forming an Asset
Forfeiture Unit within the Department to assume responsibility
for maintenance of all assets obtained by any agency from time of
seizure until final disposition.
Better cash management can be obtained by establishing a
revolving fund to finance the proposed Asset Forfeiture Unit.
This fund could be used to accept proceeds of sales of'' forfeited
assets and for paying maintenance and costs for such assets.
Seized cash awaiting disposition should be forwarded to the U.S.
Treasury for deposit.
The report also recommends that DOJ increase its use of
paralegals to improve productivity, promote the development of
technological advances to speed port-of-entry processing for
passengers, and to continue to replace and upgrade its obsolete
computer hardware systems.
"All of the three-year total of $850.1 million in
savings and revenue generation, are fully substantiated by
adequate documentation," Mr. Grace said.
Mr. Grace cautioned that in all of the ppSsCC work,
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT ON THE DEPARTMENT OF JUSTICE
Media Contact:
Gordon Stewart
American Stock Exchange
[phone]
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
The Department of Justice
Task Force Co-Chairs
Jewel Lafontant
Senior Partner
Lafontant, Wilkins,
Jones & Ware
Arthur Levitt, Jr.
Chairman
American Stock Exchange
Weston Christopherson
Chairman & CEO
Jewel Companies, Inc.
Project Manager
Clarence Wilson
Lafontant, Wilkins,
Jones & Ware, P.C.
THE REPORT RECOMMENDATIONS -- A PER
As the product of an unprecendented and wide-ranging
survey performed by private sector executives and
specialists, the recommendations in this Task Force report
must be placed in perspective. Our volunteer staff had
the formidable task of bringing their expertise to bear on
complex Federal operations in the short span of a few
months while holding down other full or part-time
employment.
1050 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
o Category II -- Subs an
ommendat ens nth a cite
c
in the opinion of the Task Fer
convincing and deserving of prompt
implementation.
g all documented and support
Despite these ehallsnges most of which were antici-
pated at the outset -- valuable analysis and issue develop-
ment were achieved. The containedsigniinfi this
report will result, if implemented, ors whose bard
savings and other benefits to American taxpay whone
work and personal sacrifices financial) support
Federal programs and operations.
We believe that the majority of our recommendations
are fully substantiate.Memrootedisleadinig a
to allege that each and every recommendation
high level of staanda
lion. Various time li
other constraints did not permit achievement of the desired
uniformity objective.
We have evaluated, therefore, the "supportability" of
the recommendations their have
grouped them into the
o Category I -- Fully substantiated and defensible
Recommendations in this category aret
Oft'a
able. e
gory may not be fully rationalised or
documented in the report, but all
indications point to the desirability
and defensibility of proceeding with
their implementation.
Category III potential) ustifiable and support
o -
ecommen ations in this cate-
4L- N
to
a
g ro y, while meritorious, are not
regarded as fully supported in the
report, due to time, personnel
d other constraints, but
resources, an
are deemed worthy of furthe' analysis
to determine the full extent of their
merit.
These category descriptions do not take into acountthe
political, social or economic conditions which may c
supportability of these recommendations for implementation.
Accordingly, it is possible, by grouping.tbe re
along the above categories, to assess more effect.ivelyi
savings.
cost savings that nprobable and This analysis
summ mary estimates s of firm,
summary
The Report Recommendations -- An Assessment
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in
the matrix on the following
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Three-Year Savings(S) and
Revenue O ortunities(R
i ions
mi
II Category III
Issue
Category I Category
JUSTJCE l:
Uncollected
*626.1(R) 1/ ?
44.2 (CA)-
Revenues
SAW
JUSTICE 2:
Asset Seizure
$244.2(CA)1/
9
9(S)
and Forfeiture
4
.
JUSTICE 3: Travel
3.6(S)
Procurement
JUSTICE 4:
legals
Use of Para-
13.4(S)
JUSTICE 5:
DOJ ADP Systems
2/(S)
JUSTICE 6:
Automated Legal
37.3(S)
Support Systems
JUSTICE 7: Federal Prison
Industries
JUSTICE 8: INS Central and
Regional Office
Staffing
JUSTICE 9: Consolidation
of Port-of-Entry Inspection
Services
JUSTICE 10: Improvement
of IG Operation
Total
Savings
Revenue
40.8 (R)
26.2(S)
47.9(S)
$850.1
$183.2
$666.9
Memo: Total Cash
Acceleration
$288.4
1/ Savings not quantified.
2/ Cash Accelerations are not included in totals.
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Contacts:
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Murray Sanders/Chris Tofalli
.The President's Private Sector
Survey on Cost Control
(202) 466-517.0
FEDERAL FEEDING PROGRAMS COULD BE IMPROVED
PROVIDING MILLIONS OF DOLLARS IN SAVINGS
WASHINGTON, June 30--By establishing a budget costing
factor which relates food costs and menu requirements to food
actually served in the military services, the Federal
Government could save more than $167 million over three years,
according to a report released today by the President's Private
Sector Survey on Cost Control in the Federal Government
(PPSSCC).
This recommendation and others pertaining to Federal
feeding activities will be considered on July 13th by a
Subcommittee of the Survey's Executive Committee chaired by
J. Peter Grace, chairman of W. R. Grace & Co., for possible
submission to the President.
The Federal Feeding task force was co-chaired by H. J.
Cofer, president of Rich-Sea Pak Corporation of St. Simons
Island, Georgia; Henry H. Henley, chairman and chief executive
officer of Cluett Peabody & Co., Inc. of New York; Edward L.
Hutton, president and chief executive officer of Chemed Corp.
of Cincinnati, Ohio; Carl Karcher, chairman and chief executive
officer of Carl Karcher Enterprises, Inc. of Anaheim,
California; and Edward Whittemore, chairman and chief executive
officer of American Brands, Inc. of New York.
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. luuub
[phone]
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-2-
The perennially high cost of military feeding is blamed
on outdated menus, lack of budgetary accountability for meal
allowances, and unauthorized access to military dining
facilities.
The report found that the method used for determining
the budget necessary to provide the military's basic daily food
allowance is outdated, essentially unchanged since 193:3.
Citing a General Accounting Office study, it was found
that food was not always consumed as reported and that food was
being wasted. This same report found that inadequate controls
existed limiting access to military dining facilities, that
meal cards were being misused and that unauthorized persons
were being fed free.
Due to a lack of adequate data and reporting
requirements, no one government office knows the size and scope
of Federal feeding. After contacting virtually every Federal
department and agency, the Task Force estimates that the
Federal Government is involved in at least 57 food-related
programs at more than 100,000 locations for a total net cost of
more than $21 billion in 1981.
Federal feeding programs have evolved independently
under numerous pieces of legislation resulting in a lack of a
consistent or comprehensive Federal policy on feeding. Without
a policy, feeding programs suffer from fragmented
implementation, insufficient management attention, poor
coordination, and thus duplication of services and payments.
(more)
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-3-
Citing an April 1983 House Appropriations Committee
Review of Bureau of Indian Affairs Contract schools it was
found that two contract schools in North Dakota were also
classified as plublic schools and received duplicate sources of
funds for its feedings programs. As a result, when the new
principal of one school reported to work, he found $200,000 in
cash and checks in a desk drawer. Although the problem has
been reported, the Government's Contract Officer Representative
has made no demand to refund the money and the school board in
considering using the surplus funds to finance a small shopping
mall near the school.
To correct this lack of management control in the
Federal feeding programs, the report concludes that the office
of Management and Budget should establish guidelines including
a clear definition of Federal feeding, management accounting
systems which will hold agencies and departments responsible
for assessing expenditures and costs, and standardization of
procurement and contracting strategies.
More consistency across government agencies could lead
to additional savings in ground beef purchases and contract
cafeteria operations.
By purchasing ground beef extended with 20 percent soy
protein as the Department of Defense does for troop feeding,
the U.S. Department of Agriculture (USDA) could save more than
$83 million over three years in the National School Lunch
Program (NSLP) without detracting from taste or nutritional
value.
(more)
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-4-
The purchase of ground beef represents one of the
largest dollar volume items purchased by the U.S. Department of
Agriculture (USDA) for donation to schools under NSLP.
Presently, USDA plurchase only pure ground beef for this
purpose, even though the Food and Nutrition Service of the
Agriculture Department permits the use of soy products in
school feeding and the DOD uses it for troop feeding.
Department of Defense tests report that the addition of soy
extenders to ground beef does not detract from the palatibility
or nutritional value of the beef.
The report notes that some cafeteria contractors pay no
rent for space, contractors outside of Washington, D.C. pay 1.5
percent of sales under GSA guidelines, and some Washington
contractors pay as high as 11.5 percent of sales. By adopting
a nationwide policy of allowing qualified bidders to bid
competitively on food service contracts and eliminating
restrictions on food contractors' profitability, the Federal
government could save $38.8 million over three years.
"Of the three-year total of $297.9 million in savings,
$91.2 million are fully substantiated by adequate
documentation, and another $206.7 million are partially
substantiated," Mr. Grace said.
Mr. Grace cautioned that in all of the PPSSCC work,
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT ON FEDERAL FEEDING
Media Contacts: Federal Feeding Task Force Co-Chairs
Paul Mitchell Carl Karcher
Carl Karcher Enterprises, Inc. Chairman & CEO
(714) 778-7134 Carl Karcher Enterprises, Inc.
Murray Sanders/Chris Tofalli H. J. Cofer, Jr.
The President's Private Sector President
Survey on Cost Control Rich-Sea Pak Corp.
[phone]
Edward Whittemore
Chairman & CEO
American Brands, Inc.
Henry H. Henley
Chairman & CEO
Cluett Peabody & Co., Inc.
Edward Hutton
President & CEO
CHEMED Corp.
Project Manager
George Schram
American Brands, Inc.
THE REPORT RECOMMENDATIONS -- A PERSPECTIVE
As the product of an unprecedented and wide-ranging
survey performed in a political atmosphere by private sector
executives and specialists, the recommendations in this Task
.Force report must be placed in perspective. Our volunteer
staff had the formidable task of bringing their expertise to
bear on complex Federal operations in the short span of a
few months while holding down other full or part-t;ime
employment.
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152 R001201530001-7
LiespiLe LACDC { 11~liCUyC.7 -- SLIVOL. W. WUSL.II W =A.= cl/lt1C1-
pated at the outset -- valuable analysis and issue develop-
ment were achieved. The recommendations contained in this
report will result, if implemented, in real and significant
savings and other benefits to American taxpayers whose hard
work and personal sacrifices financially support these
Federal programs and operations.
We believe that the majority of our recommendations
are fully substantiated. Iiowever, it would be misleading
to allege that each and every recommendation is rooted in a
uniformly high level of research, analysis and substantia-
tion. Various time limitations, business resources, and
other constraints did not permit achievement of the desired
uniformity objective.
We have evaluated, therefore, the "supportability" of
the recommendations on their management merits and have
grouped them into the following three categories.
o Category I -- Fully substantiated and defensible.
Recommendations in this category are,
in the opinion of the Task Force,
convincing and deserving of prompt
implementation.
o Category II -- Substantially documented and support-
able. Recommendations in this cate-
gory may not be fully rationalized or
documented in the report, but all
indications point to the desirability
and defensibility of proceeding with
their implementation.
o Category III -- Potentially justifiable and support-
able. Recommendations in this cate-
gory, while meritorious, are not
regarded as fully supported in the
report, due to time, personnel
resources, and other constraints, but
are deemed worthy of further: analysis
to determine the full extent.of their
merit.
These category descriptions do not take into account
political, social or economic conditions which may alter the
supportability of these recommendations for implementation.
Accordingly, it is possible, by grouping the recommendations
along the above categories, to assess more effectively the
cost savings that can be expected. This analysis permits
summary estimates of firm, probable and potential savings.
The Report Recommendations -- An Assessment
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in
the matrix on the following page.
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Category/3-Year Savings/Revenues
FEEDING 1: Policy and Management
Information I/
FEEDING 2: Substitution of
Commercially Available
Products for Federal
Specification Products
FEEDING 3: Soy Extender in
Ground Beef $83.4(S)
$8.4(S)
FEEDING 4: Food Service
Contracts 7.8(R) 31.0(R)
FEEDING 5: Troop Feeding 167.3(S)
FEEDING 6: Compendium Issue 8,233.0(5) 1,545.O(S) 1.9(R)
1.591.2(R)
Total Savings by Category $8,316.4(5) $1,720,.7(S) $ --
Total Revenue by Category 1,599.0(R) 31,,0(R) 1.9(R)
Total $9,915.4 $1,751?7 $ 1.9
1/ Savings or revenue not quantified.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
Al Ritardi
Allied Corporation
[phone]
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
PRIVATE SECTOR SURVEY RECOMMENDS MORE THAN $13 BILLION
IN SAVINGS AND REVENUE ENHANCEMENTS FOR TWO
HEALTH AND HUMAN SERVICES AGENCIES
WASHINGTON, April 18--A three-year savings and revenue
enhancement plan of more than $13 billion dollars was outlined
today by the President's Private Sector Survey on Cost Control
(PPSSCC) for the Department of Health and Human Services' Health
Care Financing Administration (HCFA) and Public Health Service
(PHS). These recommendations will be considered on May 2nd by a
Subcommittee of the Executive Committee chaired by J. Peter
Grace, chairman of W. R. Grace & Co. of New York, for possible
submission to the President.
The PPSSCC task force on HCFA and PHS was co-chaired by
Samuel H. Armacost, president and chief executive officer of Bank
of America of San Francisco; Edward L. Hennessy, chairman,
president and chief executive officer of Allied Corporation of
Morristown, New Jersey; and Charles J. Pilliod, Jr., chairman and
chief executive officer of Goodyear Tire and Rubber Co. of Akron,
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85BOl152R001201530001-7
Of the $13 billion in total suggested savings and
revenue enhancements, approximately $10.7 billion are for HCFA,
which Include:
F 1. Adopting a national prospective system for Medicare
hospital reimbursement using a fixed fee schedule
for payment by a diagnostic class.
2. Changing the method of reimbursement from a
fee-for-service basis to a prospectively negotiated
fee.
3. Establishing a mechanism within the hospital
reimbursement Medicare and Medicaid programs
directed at reducing hospital excess capacity.
Included in the more than $13 billion in total savings and
revenue generation recommended, the task force also recommended
methods for the agency to raise more than $660 million in
revenue. This would be realized by reducing the use of tax-free
bond financing for hospitals which presently encourage excess
capacity and whose costs are reimbursed by the federal government.
Also included in the task force report were savings of
approximately $1.9 billion for PHS by reducing, over three years,
the costs for administrative, equipment, and career training grants
of the National Institutes of Health; and combining field sites and
improving management practices of PHS.
"Of the three-year total of more than $13 billion in
savings and revenue enhancements for these two agencies, $9.8
billion are fully supported by adequate documentation and another
$3.5 billion are partially supported," Mr,. Grace said.
(more)
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Mr. Grace cautioned that in all of the PPSSCC work
estimated savings and revenue enhancements are more of a_
"planning" quality and not of a precise "budget" quality.
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
F
;TASK FORCE REPORT FOR THE DEPARTMENT OF HEALTH AND HUMAN
SERVICES (HHS) HEALTH CARE FINANCING
ADMINISTRATION (HCFA) AND PUBLIC HEALTH SERVICE (PHS)
Dept. of Health and Human
Services Task Force
Media Contacts: Co-Chairs
Al Ritardi Samuel Armacost
Allied Corporation President and Chief
[phone] Executive Officer
Bank of America
Murray Sanders/Chris Tofalli Edward L. Hennessy
The President's Private Sector Chairman, President and
Survey on Cost Control Chief Executive Officer
[phone] Allied Corporation
Charles J. Pilliod
Chairman and Chief
Executive Officer
Goodyear Tire & Rubber Co.
Project Manager
Al Ritardi
Allied Corporation
The Report Recommendations -- A Perspective
It is vitally important that the recommendations in
this Task Force Report be placed in perspective. They are
the product of an unprecedented and wide-ranging survey that
was performed in a politically-charged atmosphere by private
sector executives and specialists whose service's were volun-
teered - often on a part-time basis. This staff had the
formidable task of bringing their expertise to bear on
largely unfamiliar and complex Federal operations in the
short span of a few months. Frequently, these efforts were
expended while holding down other full or part-time employ-
ment.
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
(202) 466-S170
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
Despite these difficult and perplexing challenges --
all of which were anticipated at the onset -- a great deal
of valuable work was performed. The recommendations
contained in this Report, if implemented, will result in
real and significant savings and other benefits_to American
taxpayers whose
lehard dezalwork
program~eandnoperationsc~s foot the
bill for these
We have sought to be realistic about the recommenda-
tions reported. The great majority of them, we believe, are
fully substantiated. However, it would be misleading for us
to leave the impression that each and every recommendation
is rooted in a uniformly high level of research,, analysis,
and substantiation. The press of time, other business
commitments, lack of adequate resources, and other con-
straints did not always permit the luxury of achieving this
desired uniformity.
As a result, and to promote a realistic expectation of
recommendations reported, we have evaluated the "support-
ability" of the recommendations on their management merits
and have grouped them into three categories,
o Category I -- Fully substantiated and defensible.
Recommendations in this category are,
in the opinion of the Task Force,
convincing and deserving of prompt
implementation.
o Category II =- Substantially documented and support-
able. Recommendations in this category
may not be fully rationalized ordocu-
mented in the Report, but all indica-
tions point to the desirability and
defensibility of proceeding with their
1 implemetation.
o Category III -- Potentially justifiable and support-
able. Recommendations 16--ES-is
c egory, while meritorious, ae not
regarded as fully supported the
Report, due to time, personnel
sources, and other constraints, but are
deemed worthy of further analysis to
determine the full extent of their
merit for implementation.
These category descriptors do not take into account
political, social or economic conditions which may alter the
supportability of these recommendations for implementation.
Accordingly, by grouping the recommendations along the above
categories, it is possible to assess more effetv elymthe
cost savings that can be expected, This analysis
summary estimates of: (1) firm, (2) probable,r and (3)
potential savings.
The Re ort Recommendations -- An Assessment
Based on the above perspective and categorization, an
asses.=vnent of the reported recommendations is contained in
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Category:
Three year Savings/Revenue
Opportunities (S millions)
I . II III
54.0(S) $ -- S
HHS-HCFA 2 446.9(5)
Medicare Claims Audit:
Improve and expand audit
and medical review system.
HHS-HCFA 3 5,600.0(S)
Hospital Reimbursement:
Adopt prospective fixed
price reimbursement as
method of medicate payment
to hospitals and expand the
system to include payments
from all sources.
HHS-HCFA 1 $
Medicare Contracts - Competi-
tive Bids: Expand experi-
mentaT~ixed price competitive
efforts and pursue legislation
to allow such contracts on a
national basis.
HHS-HCFA 4
Physician Reimbursement:
Change method of reimburse-
ment from a fee-for-service
basis to prospectively
negotiated fee
HHS-HCFA 5
Reduce Hospital Excess Capacity:
Establish mechanism within the
hospital reimbursement Medicare
and Medicaid programs directed
at reducing hospital excess
capacity.
HHS-HCFA 6
-Establish a HCFA-based Electronic
Data Processing System.
939.0(S)
662.0 (R)
$3,340.0(S)
324.4(S)
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HHS-H"FA 7 $
Change the Management of HCFA
from a regulatory administrative
agency to a Health Care Financ-
ing Commission.
HHS-HCFA 8
Reduce the Staff of HCFA and
Consolidate and Centralize
Operating Sites.
Total HCFA Savings by
Category:
Category:
Three year Savings/Revenue
Opportunities (S millions)
I II III
Unknown
32.1(S)
$ 7,396.4 $ 3,340.0 $ 0.0
Total HCFA Revenue
Generation By Category $ 662.0 $
HHS-PHS 1 554.3(S)
Reduce Cost of Administration
o NIH Grants, Contracts and
Equipment to universities
receiving grants.
HHS-PHS 2
Revise Reimbursement Procedures
to contract care providers of
the Indian Health Service.
116.8(S)
HHS-PHS 3 200.4(S)
Institute a Cost Control
Management by Objectives
Program within the Public
Health service.
HHS-PHS 4 160.3(S)
Change the Eligibility
Criteria for Indian Health
Service coverage and benefits.
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Category:
Three yeai Savings/Revenue
Opportunities (S millions)
I II III
HHS-PHS 5
168.9(S)
$ --
Consolidate Federal Toxic-
0 ogy Testing Programs, the
Public Health Service and The
National Toxicology Program.
HHS-PHS 6
17.2(S)
Eliminate Inconsistencies in
the NIH Grants Process.
HHS-PHS 7
32.0 (CM)
Improve the Credit and Collec-
tion Procedures o e Student
Grant Program.
HHS-PHS 7-1
26.3 (CM)
Increase Revenues Collected
from National Health Service
Corps Staffed Sites.
HHS-PHS 8
14.1(S)
Close the Rocky Mountain
Laboratory of the N.I.H.
HHS-PHS 8-1
0.8(S)
Close the Phoenix Office of CDC.
HHS-PHS 9
150.6(S)
Eliminate and Transfer Staff
-
Assistant
within Office of
Secretary for Health.
HHS-PHS 10
474.0(S)
Eliminate Redundant Functions
and Staff Throughout the PHS.
Total PHS Savings by Category:
$1,688.5
$ 168.9
S 0.0
Total PHS cash management:
$ 58.3
$ --
$
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
Andy _Chitiea
Signal Companies
La Jolla, CA
(619) 457-3555
Jim DiClerico/Murray Sanders
The President's Private Sector
Survey on Cost Control
(202) 466-5170
BUSINESS GROUP OFFERS HHS COST REDUCTION PLAN
WASHINGTON, April 5 -- The President's Private Sector Survey
on Cost Control in the Federal Government (PPSSCC) today made public a
task force report on a portion of the Department of Health & Human
Services (HHS) containing proposed cost savings of at least $601.7
million in three years. This first group of HHS recommendations will
be considered on April 15th by a Subcommittee of the Survey's
Executive Committee chaired by J. Peter Grace, chairman of W. R. Grace
& Co., for possible submission to the President.
The partial PPSSCC Department of Health and Human Services
Task Force was headed by Michael Dingman of Wheelabrator-Frye, Inc.
and Forrest Shumway of The Signal Companies, Inc.
"Of the three-year total of more than $600 million of
recommended savings, $494 million are fully supported by adequate
documentation and another $108 million are partially supported," Mr.
Grace said.
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
He cautioned that in all of the PPSSCC work estimated
savings are more of a "planning" quality and not of a precise "budget"
quality.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
TASK FORCE REPORT FOR THE DEPARMENT OF HEALTH AND HUMAN SERVICES
(HHS) -- DEPARTMENT OF MANAGEMENT,
HUMAN DEVELOPMENT SERVICES, AND ACTION
Media Contacts:
Andrew Chitiea
The Signal Companies, Inc.
La Jolla, CA
(619) 457-3555
Jim DiClerico/Murray Sanders
The President's Private Sector
Survey on Cost Control
(202) 466-5170
Department of Health and
Human Services Task Force
Co-Chairs
Michael Dingman
Chairman and Chief Executive
Officer
Wheelabrator-Frye, Inc.
Forrest Shumway
Chief Executive Officer
The Signal Companies, Inc.
Project Manager
Andrew Chitiea
The Signal Companies, Inc.
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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REPORT RECOMMENDATIONS -- A PERSPECTIVE
To promote a realistic expectation of recommendations
reported, we have evaluated the "supportability" of the
recommendations on their management merits and have grouped
them into three categories.
- Category I -- Fully Substantiated and Defensible.
Recommendations in this category are,
in the opinion of the Task Force,
convincing and deserving of prompt
implementation.
- Category II -- Substantially Documented and Support-
able.
Recommendations in this category may
not be fully rationalized or
documented in the Report, but all
indications point to the desirability
and defensibility of proceeding with
their implementation.
- Category III -- Potentially Justifiable and
Supportable.
Recommendations in this category,
while meritorious, are not regarded
as fully supported in the Report, due
to time, personnel resources, and
other constraints, but are deemed
worthy of further analysis to
determine the full extent of their
merit for implementation.
These category descriptors do not take into account
political, social or economic conditions which may alter the
supportability for implementating these recommendations.
Accordingly, it is possible, by grouping the recommendations
along the above categories, to more effectively assess the
cost savings that can be expected. This analysis permits
summary estimates of: (I) firm, (II) probably, and (III)
potential savings.
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Categorization of Savings
Category/3 Year Savings/
Revenue Opportunities
($ millions)
I II III
HHS MGMT 1-1: Reduce the ACTION S-- $ 26.7(S) $--
staff by 40 percent.
HHS MGMT 2-1 through 2-84: Re- 212.8(S)
structure HHS Department manage-
ment to eliminate organization
layering and duplication.
HHS MGMT 3-1 through 3-5: Stream- 7.1*(S)
line correspondence control and
clearance procedures to assure
more timely response at less cost.
HHS MGMT 4-1 and 4-2: Eliminate the 46.0(S)
policy research of HHS Department
Management.
HHS MGMT 5-1 and 5-2: Eliminate
evaluation projects within the
Office of the Secretary.
HHS MGMT 6-1 through 6-17: Re-
56.3(S)
organize the Office of Human
Development Services (HDS) to
improve effectiveness and reduce
costs.
HHS MGMT 7-1 through 7-4: Modify
66.2(5)
management practices and the
organizational structure of HDS
to improve social research.
HHS MGMT 8-1 and 8-2: Adopt the
158.9(S)
delay-of-drawdown program in the
remaining states and/or adopt the
checks paid letter of credit
approach for advancing Medicaid
funds.
Total Cost Savings (S) by Category
$494.2
34.8(S)
$107.5 $ -0-
*Savings duplicated in HHS MGMT 2, not included in total.
Figures are three year cost savings adjusted for inflation but
net of implementation costs.
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13F
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
cjjrr
Contacts:
Jack Whitelaw
Vought Corporation
[phone]
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
PRIVATE SECTOR SURVEY OUTLINES $11.2 BILLION IN SAVINGS
AND REVENUE GENERATION FOR FEDERAL HOSPITAL MANAGEMENT SYSTEM
WASHINGTON, May 6--The Federal Government can save
approximately $8.5 billion, over three years, by improving its
Federal hospital management system according to a study made
public today by the President's Private Sector Survey on Cost
Control in the Federal Government (PPSSCC). In addition to the
recommended savings outlined, the business panel also outlined
approximately $2.7 billion in revenue generation methods.
These recommendations will be considered on May 17th
by a Subcommittee of the Executive Committee chaired by
J. Peter Grace, chairman of W. R. Grace & Co., for possible
submission to the President.
The Federal Hospital Management Task Force was
co-chaired by Raymond A. Hay, president of The LTV Corporation
of Dallas William B. Johnson, chairman of IC Industries of
Chicago; James L. Ketelsen, chairman and chief executive
(more)
1850 K Street, N.W. a Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
officer of Tenneco of Houston; and Henry E. Simmons, national
director of Health Care Consulting Programs, Peat, Marwick,
Mitchell & Co. of Washington, D.C.
In addition to reviewing the entire Federal hospital
management system, the PPSSCC Task Force also studied the
Department of Defense and Veterans Administration hospital
systems.
Because of widespread underutilization of Federal
hospitals, the Task Force report recommended that the
Department of Defense freeze construction funds for 27 small
hospitals, and 20 larger hospitals that are scheduled for major
renovation or construction. This step, in addition to
appointing a full-time director of Shared Health Resources, to
establish central authority, would help to reduce the number of
underutilized hospitals and result in more efficient and better
technically-staffed hospitals.
The findings also include installing a data
processing system at the Veterans Administration at a cost of
$190-$250 million. Despite the initial outlay of money,
installing the system would result in eliminating duplicative,
erroneous data and provide necessary data for resource planning
and local hospital operation.
The report also outlined the costly operation of the
depot system for distributing medical supplies. The findings
(more)
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-3-
suggest phasing out the VA depot system because expensive local
market purchasing takes place despite the depot system, thus
defeating the purpose of the depot system. It was also
recommended that the VA and Department of Defense purchase
medical supplies through national contracts to reduce costs.
"Of the three-year total of $11.2 billion in savings
and revenue generation, $2 billion are fully substantiated by
adequate documentation, and another $9.2 billion are partially
substantiated," Mr. Grace said.
Mr. Grace cautioned that in all of the PPSSCC work,
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
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~4a~x=rsj- MEDIA SUMMARY
TASK FORCE REPORT ON FEDERAL HOSPITAL MANAGEMENT
Media Contacts:
Federal Hospital Management
Task Force Co-Chairs
-
Jack Whitelaw Raymond L. Hay
Vought Corporation President
(703) 521-6560 The LTV Corporation
Murray Sanders/Chris Tofalli William B. Johnson
The President's Private Sector Chairman
Survey on Cost Control IC Industries
(202) 466-5170
James L. Ketelsen
Chairman and Chief
Executive Officer
Tenneco
Dr. Henry E. Simmons
National Director
Health Care Consulting Programs
Peat, Marwick, Mitchell and Co.
Project Manager
Jack Whitelaw
Vought Corporation
THE REPORT RECOMMENDTIONS -- A PERSPECTIVE
-- - --- ---------
It is vitally important that the recommendations in
this Task Force Report be placed in perspective. They are
the product of an unprecedented and wide-ranging survey that
was performed in a politically-charged atmosphere by private
sector executivies and specialists whose services were
volunteered often on a part-time basis. This staff had the
formidable task of bringing their expertise to bear on
largely unfamiliar and complex Federal operations in the
short span of a few months. Frequently, these efforts ware
expended while holding down other full- or part-time employ-
ment.
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
t2n214S6-s17n
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--
Despito these difficult and perplexing challengesd--l
all of which were anticipated at the outset-- a great
of valuable work was performed. The recommendations con-
tained in this Report will result, if implemented, in real
and significant savings and other benefits to American tax-
payers whose hard work and personal sacrifices foot the bill
for these Federal programs and operations.
We have sought to be realistic about the recommenda-
tions reported. The great majority of them, we believe, are
fully substantiated. However, it would be mislealing for us
to leave the impression that each and every recommendation
is rooted in a uniformly high level of research, analysis,
and substantiation. The press of time, other business
commitments, lack of adsquate resources, and other const-
raints did not always permit the luxury of achieving this
desired uniformity.
As a result, and to promote a realistic expectation of
a" of the recommendati nsvonetheirtmanagement omerits
abibillityty
and have grouped them into three categories.
o Category I -- Fully substantiated and defensible.
Recommendations in this category
are, in the opinion of the Task
Force, convincing and deserving of
prompt implementation.
o Category II -- Substantially documentedd suooor_
table. Recommendations in this
category may not be fully rational-
ized-or documented in the Report,
but all indications point to the
desirability and defensibility of
proceeding with their implementa-
tion.
-justifiable and suEpor_
o Category III -- Potentially
table.~Recommendations in this
category, while meritorious, are not
regarded as fully supported in the
Report, due to time, personnel
resources, and other constraints,
but are deemed worthy of further
analysis to determine the. full
extent of their merit for implemen-
tation.
These category descriptors do not take into account
political, social or economic conditions which may alter the
supportability of these recommendations for implementation.
Accordingly, it is possible, by grouping the recommendations
along the above categories, to assess more effectively the
cost savings that can be expected. This analysis permits
summary estimates of: (1) firm, (2) probable, and (3) pot-
ential savings.
The Reoort Recommnenda*ions --_An Assessment
_
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in
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CATEGORY/3 YEAR SAVINGS/REVENUE OPPORTUNITIES
[NET OF IMPLEMENTATION COSTS
($ millions)
I II III
ISSUE
$687.7(S)
$ - $
744.7(S)
4284.0(S)
589.5(S)
731.6(5)
(350.0)(Cost)
431.1(S)
221.8(5)
68.6(R)
HOSP 11 Medical care cost recovery 1211.4(R)
from insured inactive
beneficiaries in the DOD
HOSP 12-1 VA rate change 102.6(5)
HOSP 12-2 F.I.S. contracted 719.1(5)
HOSP 12-2 Eliminate duplicate payments 109.2(S)
HOSP 12-3 IHS rate change 86.1(5)
HOSP 12-4 FIs contracted 28.3(S)
HOSP 1 Freeze construction for small
underutilized hospitals and
those generating at less than
60% occupancy
HOSP 3 Create a central DOD health
entity
HOSP 4 Improve planning and resource
allocation in VA hospital
system
HOSP 5-1 Stop nursing home construction
HOSP 5-3 Reorganize VA office of
construction
HOSP 7 Management information system
for VA hospital system
HOSP 8 Phase out VA medical supply
depots and reduce DOD supply
levels to $100 million
HOSP 9 Reduce open market purchase of
medical supplies
HOSP 10 Improve DOD procedures for
recovering cost of medical
from third parties
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I
II
ROSY 12-4
Eliminate duplicate payments
8 6.1(S)
NOSY 13-2
Establish a means test and
pursue recovery
1441.2(R)
Total Cost Savings(S)
-
by Category
Total Revenue Generation (R)
51930.1(S)
6891.S)
by Category
68.6(R)
2652.6(8
$1998.7
$9544.3
(350.0)
$9194.3
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f5D
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
COST SAVINGS OF $9.6 BILLION POSSIBLE BY SOCIAL SECURITY
ADMINISTRATION ACCORDING TO PRESIDENTIAL STUDY GROUP
WASHINGTON, June 3--The Social Security Administration
(SSA) can save $9.6 billion over a three-year period by
improving its overall management and administrative operations,
according to a study released today by the President's Private
-Sector Survey on Cost Control in the Federal Government
(PPSSCC).
These recommendations will now be considered on. June
13th by a Subcommittee of the Executive Committee chaired by
J. Peter Grace, chairman of W. R. Grace & Co., for possible
submission to the President.
The Social Security Administration Task Force was
co-chaired by John J. Byrne, chairman, chief executive officer
and president of GEICO Corporation of Washington, D.C.; Joseph
P. Downer, vice chairman of Atlantic Richfield Corporation of
Los Angeles; Harold A. Eckmann, chairman and chief executive
officer of Atlantic Mutual Insurance Company of New York; and
George P. Jenkins, of W. R. Grace & Co. of New York.
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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-2-
The task force identifies opportunities for
reorganizing the management system of the SSA and cites the
lack of senior management continuity from the Commissioner
level to key deputies and below, as a contributing factor to
SSA's need for improved performance.
The report recommends initiating a comprehensive
organizational reassessment of the SSA, which would include
decentralizing selected headquarters activities and
consolidating various field activities in a smaller number of
larger facilities.
Need for the Commissioner's position to be viewed as a
long-term "career" position, outside the vagaries of changes in
national administrations, and central to the implementation of
many recommendations is the upgrading of SSA's obsolete
automated data processing system. The task force is critical
of the SSA's automated data processing system, which is
essential to the survival of the agency, but agrees and
supports the initiatives currently underway to implement. its
ADP modernization plan.
Operational issues, including management supervision,
consolidation of certain facilities, and erroneous payments,
were also reviewed by the task force and identified as targets
for improvements, with significant potential for savings.
(more)
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-3-
Cited by way of example was the SSA's Program
Operating Manuals System (POMS), which is used by agency-
personnel responsible for preparing and/or processing claims.
The report notes that, at present, the manual contains
some 25,000 pages, and is more than four feet thick. There are
more than 12,000 revisions each year in the manual, which had
an initial printing of 49,000 copies, at a cost of $4.4 million
and an additional $6.3 million for shipping to outlaying
offices.
Studies by the PPSSCC Task Force revealed that each
person who has a manual is allowed one hour per week to review
and file revisions, which number about 12,000 revisions per
year. This suggests an average of 230 pages per week to scan
and fileI obviously not a task to be completed in one hour.
Improvement of the appellate system for Social
Security Disability Claims was also reviewed by the task force,
which recommended modifications throughout the disability
claims appeal process to greatly improve efficiency, provide
better management conditions, enhance the quality of fairness
of decisions rendered, and reduce costs without detrimental
effects on individual claimants' rights.
(;n ore)
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The task force noted that rates at which earlier
benefit denials are reversed increase as requests for
disability claims progress along the appellate process,
creating a significant backlog of cases, currently estimated at
150,000 cases. The report notes that on each progressive step
through the system, there are continuing opportunities for
success, with approximately 60 percent of disability claims
heard by administrative law judges being reversed.
"Of the three-year total of $9.6 billion in
recommended savings/revenue enhancements, $4.3 billion are
fully substantiated by adequate documentation, and another $5.3
oillion are partially substantiated," Mr. Grace said.
Mr. Grace cautioned that in all of the PPSSCC work,
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT ON HHS-SOCIAL SECURITY ADMINISTRATION
Media Contacts: HHS-Social Security Admin-
istration Task Force Co-Chairs
Guy Smith
GEICO Corporation George P. Jenkins
(202) 986-2757 W.R. Grace & Co.
Murray Sanders/Chris Tofalli Harold A. Eckmann
The President's Private Sector Chairman & Chief Executive
Survey on Cost Control Officer
[phone] Atlantic Mutual Insurance Co.
John J. Byrne
Chairman, Chief Executive
Officer & President
GEICO Corporation
.-Joseph P. Downer
Vice Chairman
Atlantic Richfield Corp.
Project Manager
John J. Byrne
The Atlantic Mutual Insurance
Company
THE REPORT RECOMMENDATIONS -- A PERSPECTIVE
It is vitally important that the recommendations in
this Task Force Report be placed in perspective. They are
the product of an unprecedented and wide-ranging survev by
private sector executives and specialists whose services
were volunteered -- often on a part-time basis. This staff
had the formidable task of bringing its expertise to bear
on largely unfamiliar and complex Federal operations in the
short span of a few months. Frequently, these efforts were
expended while holding down other full- or part-time employ-
ment.
1850 K Street, N.W. 0 Suite 1150 ? Washington, D.C. 20006
(212) 466-517:1,
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Despite these difficult and perplexing challenges --
all of which were anticipated at the onset -- a great deal
of valuable work was performed. The recommendations con-
tained in this Report will result, if implemented, in real
and significant savings and other benefits to American
taxpayers whose hard work and personal sacrifices foot the
bill for these Federal programs and operations.
The Task Force has sought to be realistic about the
recommendations reported. The great majority of them, we
believe, are fully substantiated. However, it would be
misleading for the Team to leave the impression that each
and every recommendation is rooted in a uniformly high
level of research, analysis, and substantiation. The press
of time, other business commitments, lack of adequate
resources, and other constraints did not always permit the
luxury of achieving this desired uniformity.
As a result, and to promote a realistic expectation of
recommendations reported, the Task Force has evaluated the
"supportability" of the recommendations on their management
merits and has grouped them into three categories.
o Category I -- Fully substantiated and defensi-
ble. Recommendations in this
category are, in the opinion of
the Task Force, convincing and
deserving of prompt implementation.
o Category II -- Substantially documented and~su~~
portable. Recommendations in this
category may not be fully rational-
ized or documented in the Report,
but all indications point to the
desirability and defensibility of
proceeding with their implementa-
tion.
o Category III -- Potentially justifiable and sup-
portable. Recommendations ithis
category, while meritorious, are
not regarded as fully supported in
the Report, due to time, personnel
resources, and other constraints,
but are deemed worthy of further
analysis to determine the full
extent of their merit for imple-
mentation.
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#3D
Contacts:
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
John Harris
Stone & Webster
[phone]
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
REAGAN COST CONTROL PANEL OUTLINES $5.4 BILLION
IN SAVINGS BY IMPROVING FEDERAL CONSTRUCTION MANAGEMENT
WASHINGTON, May 6--A three-year cost savings plan
totalling approximately $5.4 billion was outlined today by the
President's Private Sector Survey on Cost Control in the Federal
Government (PPSSCC) by improving government construction
procedures.
These recommendations will be considered on May 17th by
a Subcommittee of the Executive Committee chaired by J. Peter
Grace, chairman of W. R. Grace & Co., for possible submission to
the President.
The PPSSCC Task Force on Federal Construction
Management was co-chaired by Robert J. Buckley, chairman and
president of Allegheny International, Inc. of Pittsburgh;
Raymond C. Foster, chairman, president and chief executive
officer of Stone and Webster of New York; Melvyn Klein,
president and chief executive officer of ALTAMIL Corporation of
Corpus Christi, Texas; John W. Kluge, chairman, president and
(more)
1850 K Street, N.W. 0 Suite 1150 s Washington, D.C. 200C6
[phone]
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chief executive officer of Metromedia, Inc. of New York;
Frederick P. Rose, chairman of Rose Associates, Inc. of New
York; and Paul J. Schierl, president and chief executive officer
of Fort Howard Paper Co. of Green Bay, Wisconsin.
The Task Force report indicated that Federal
construction projects are burdened by costs higher than those of
the private sector, in part because there are no incentives for
Federal employees to hold down costs. The.-report also noted
that individual projects, as well as entire programs, have
become burdened with costly requirements, yielding low or
marginal benefits to the public.
In order to help reduce Federal construction costs, the
Task Force recommended increasing the use of performance
specifications prior to actual construction, and changing
various environmental procedures and requirements. The report
also recommended improving the construction program and project
management.
"Of the three-year total of more than $5.4 billion in
recommended savings, $613 million are fully substantiated by
adequate documentation and another $4.8 billion are partially
substantiated," Mr. Grace said.
Mr. Grace cautioned that in all of the PPSSCC work,
estimated savings and revenue enhancements are more of a
"planning" quality and not of a precise "budget" quality.
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M6 Aw
THE PRESIDENTS PRIVATE SECTOR SURVEY ONCOST CONTROL
MEDIA SUMMARY
Media Contacts:
John Harris
Stone and Webster
(202) 466-7415
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
-.(202) 466-5170
Federal Construction Management
Task Force Co-Chairs
Robert J. Buckley
Chairman and President
Allegheny International
Raymond Foster
Chairman, President and Chief
Executive Officer
Stone and Webster
Melvyn Klein
President 4nd Chief
Executive Officer
ALTAMIL Corporation
John W. Kluge
Chairman, President & Chief
Executive Officer
Metromedia, Inc.
Frederick P. Rose
Chairman
Rose Associates, Inc.
Paul L. Schierl
President and Chief
Executive Officer
Fort Howard Paper Company
Project Manager
Ed Isley
A. T. Kearney, Inc.
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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THE REPORT RECOMMENDATIONS - A PERSPECTIVE
It is vitally important that the recommendations in
this Task Force Report be placed in perspective. They are
the product of an unprecedented and wide-ranging survey that
was performed in a politically charged atmosphere by private
sector executives and specialists whose services were volun-
teered -- often on a part-time basis. This staff had the
formidable task of bringing their expertise to bear on
largely unfamiliar and complex Federal operations in the
short span of a few months. Frequently, these efforts were
expended while holding down other full- or part-time employ-
ment.
Despite these difficult and perplexing challenges --
all of-which were anticipated at the outset -- a great deal
of valuable work was performed. The recommendations con-
tained in this Report, if implemented, will result in real
and significant savings and other benefits to American tax-
payers whose hard work and personal sacrifices foot the bill
for these Federal programs and operations.
We have sought to be realistic about the recommenda-
tions reported. The great majority of them, we believe, are
fully substantiated. However, it would be misleading for us
to leave the impression that each and every recommendation
is rooted in a uniformly high level of research, analysis,
and substantiation. The press of time, other business com-
mitments, lack of adequate resources, and other constraints
did not always permit the luxury of achieving this desired
uniformity.
As a result, and to promote a realistic expectation of
recommendations reported, we have evaluated the "support-
ability" of the recommendations on their management merits
and have grouped them into three categories.
o Category I -- Fully substantiated and'def ensible.
Recommendations in this category
are, in the opinion of the Task
Force, convincing and deserving of
prompt implementation.
o Category II -- Substantially documented and sup-
portable. Recommendations in this
category may not be fully rational-
ized or documented in the Report,
but all indications point to the
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desirability and defensibility of
proceeding with their implementa-
tion.
o Category III -- Potentially justifiable and support-
able. Recommendations in this cate-
gory, while meritorious., are not
regarded as fully supported in the
Report, due to time, personnel re-
sources, and other constraints, but
are deemed worthy of further anal-
ysis to determine the full extent of
their merit for implementation.
These category descriptors do not take into account
political, social, or economic conditions which may alter
the supportability for implementing these recommendations.
Accordingly, by grouping the recommendations along the above
categories, it is possible to assess more effectively the
cost savings that can be expected. This analysis permits
summary estimates of: (1) firm, (2) probable, and (3) po-
tential savings opportunities, while recognizing that the
proposed savings dollars themselves are of a "planning esti-
mate" quality (i.e., generally statistically derived) and
not yet of a "budget quality."
The Report Recommendations - An Assessment
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in
the matrix on the following page.
(Matrix of recommendations on following page]
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
Ginger Shearburn
Diamond Shamrock Company
Dallas, Texas
[phone]
Jim DiClerico/Murray Sanders
The President's Private Sector
Survey on Cost Control
[phone]
PRIVATE SECTOR PANEL DETAILS COST REDUCTION PLAN
FOR EPA/SBA/FEMA OF AT LEAST $1.8 BILLION
WASHINGTON, April 5 -- A report of the task force of The
President's Private Sector Survey on Cost Control in the Federal
Government (PPSSCC) on the Environmental Protection Agency (EPA), the
Small Business Administration (SBA), and the Federal Emergency
Management Agency (FEMA) was made public today, containing proposed
cost savings of more than $1.8 billion over a three-year period.
At a public meeting on April 15th, these recommendations
will be considered by a Subcommittee of the Survey's Executive
Committee chaired by J. Peter Grace, chairman of W. R. Grace & Co. of
New York, for possible submission to the President.
The EPA/SBA/FEMA Task Force was co-chaired by William H.
Bricker, chairman and chief executive officer of Diamond Shamrock
Corporation of Dallas, and Ben F. Love, chairman and chief executive
officer of Texas Commerce Bancshares, Inc. of Houston.
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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"Of the three-year total of $1.8 billion of recommended
savings, $1.5 billion are fully supported by adequate documentation
and another $245.5 million are partially supported," Mr. Grace said.
"Besides the recommended ways to save money," the Private
Sector Survey chairman said, "there are recommendations which we
believe could result in revenue enhancement in the amount of $80.8
million."
Mr. Grace cautioned that in all of the PPSSCC work estimated
savings are more of a "planning" quality and not of a precise "budget"
quality.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
TASK FORCE REPORT FOR EPA/SBA/FEMA
Media Contacts
Ginger Shearburn (EPA)
Diamond Shamrock Company
[phone]
Lee Strauss (SBA/FEMA)
Texas Commerce Bancshares
(713) 236-4322
Jim DiClerico/Murray Sanders
The President's Private Sector
Survey On Cost Control
[phone]
EPA/SBA/FEMA Task Force
Co-Chairs
William H. Bricker
Chairman, President and
Chief Executive Officer
Diamond Shamrock Company
Ben F. Love
Chief Executive Officer
Texas Commerce Bank
Project Managers
Lee Strauss(SBA/FEMA)
Texas Commerce Bancshares
Roger Batchelor(EPA)
Diamond Shamrock Corporation
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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THE REPORT RECOMMENDATIONS - A PERSPECTIVE
The recommendations in the EPA section of the Task
Force Report are the product of an unprecedented and
wide-ranging survey by private sector management
personnel.
Every effort has been made to estimate accurately the
savings from the Task Force's recommendations and the time
necessary to implement these recommendations. We must
emphasize, however, that the significance of the recommenda-
tions lies more in their validity than in the exact amounts
of projected savings. Accordingly, we believe that
evaluations of the study must focus on the management
direction indicated by the recommendations.
The recommendations identify several areas in which the
Agency's staff can be reduced. We continue to hold these
conclusions valid for the subjects studied despite the
debate - six months after this survey - about whether EPA
has adequate personnel to perform its charge. The fact
remains that all the major environmental laws anticipate the
ultimate adoption of state implementation plans. We are
firmly convinced that staff reductions of the magnitude
outlined in this report are possible if EPA's Washington
headquarters focuses on establishing policy, delegates
responsibility for oversight to its 10 regional offices, and
allows the state environmental agencies to perform the
functions anticipated by Congress.
To promote a realistic expectation of the recommenda-
tions, we have evaluated and grouped them into three cate-
gories based on their management merit.
o Category I -- Fully substantiated and defensible.
Recommendations in this category
are, in the opinion of the Task
Force, convincing and deserving of
prompt implementation.
o Category II -- Substantially documented and sup-
portable. Recommendations in this
category may not be fully rational-
ized or documented in the Report,
but all indications point to the
desirability and defensibility of
proceeding with their implementa-
tion.
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o Category III -- Potentially justifiable and
supportable. Recommendations
in this category, while meri-
torious, are not_ regarded as
fully supported in the Deport,
due to time, personnel re-
sources, and other constraints,
but are deemed worthy of
further analysis to determine
the full extent of their merit
for implementation.
The Task Force believes that EPA and the Office of
Management and Budget will find the recommendations worthy
of implementation or referral to Congress for appropriate
legislative action.
The Report Recommendations -- An Assessment
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in
the matrix on the following pages:
[Matrix on following pages]
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Recommendation
Category
3-Year Savings
Opportunities
($ millions)
(net of implementation costs)
EPA 1-1: Redirect construction $46.3
grants program to states.
EPA 1-2: Develop national NE
construction grant program
policy; oversee state
implementation.
EPA 1-3: Resolve inconsis- NE
tencies among construction
grant program needs, funding
levels, and compliance dead-
lines.
EPA 2-1: Accelerate delegation 17.8
program to states.
EPA 3-1: Consolidate categorical
grants, and phase down Federal
funding levels.
EPA 3-2: Modify state-
mat-- ching and future level-
of-effort funding to
correspond with EPA 3-1.
EPA 3-3: Support development
of nonconventional revenue
sources for state programs.
EPA 4-1: Use more class
perm- s for treatment and
storage of hazardous
wastes.
EPA 4-2: Expand use of
general permitting
EPA 4-3: Amend Clean Water
Act to extend deadline
for achievement of BAT
guidelines and extend
time limitations of
NPDES permit life.
$120.0
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Category
3-Year Savings
Opportunities
Recommendation
($ millions)
(net of implementation costs)
I
II
III
EPA 4-4: Discontinue
$15.6
$,-0-
$-0-
NPDES grants to
unqualified states after
FY 1985.
EPA 5-1: Simplify contract
procurement process. 3.9
EPA 5-2: Improve contract 59.0
management.
EPA 6-1: Close six regional
laboratories.
EPA 7-1: Centralize research 16.4
data base; eliminate
duplicative literature
searches.
EPA 7-2: Cease funding for
Centers of Excellence. 11.2
EPA 7-3: Eliminate Office
of Re-search Grants and
Centers.
EPA 7-4: Conduct more
cooperative research
agreements in house.
EPA 7-5: Develop five- NE
year research strategy.
EPA 8-1: Close Ada, OK
research laboratory.
EPA 8-2: Close Grosse
Isle field station.
EPA 9-1: Eliminate small
organizational units.
EPA 9-2: Eliminate non-
career special assistant
slots.
EPA 9-3: Eliminate deputy
positions at office
level and below.
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Category
3-Year Savings
Opportunities
($ millions)
Recommendation (net of implementation costs)
I II III
EPA 9-4: Reduce personnel $-0- $12.9 office staff.
EPA 10-1: Redirect
training and development
program funds.
EPA 10-2: Amend IDP
program.
EPA 10-3: Enforce meaningful
standards of performance.
EPA 11-1: Authorize
implementation of EPA
ADP report with
modifications.
EPA 11-2: Develop ADP
systems manuals.
EPA 11-3: Initiate computer NE
processing study.
EPA 12-1: Consolidate
redundant budget work.
EPA 12-2: Simplify procedures
for managing office budgets.
EPA 12-3: Update Planning NE
and Beget Manual.
EPA 12-4: Reestablish
e- sxiti g financial manage-
ment system as Agency
standard; improve system.
EPA 12-5: Develop cost
accounting system.
Total Cost Savings By Category
NE
.6
$209.4 $253.5 $2.1
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THE REPORT RECOMMENDATIONS - A PERSPECTIVE
It is vitally important that the recommendations of the
SBA Task Force be placed in perspective. They are the
product of an unprecendented and wide-ranging survey that
was performed in a politically-charged atmosphere by private
sector executives and specialists whose services were volun-
teered - often on a part-time basis. This staff had the
formidable task of bringing their expertise to bear on
largely unfamiliar and complex Federal operations in the
short span of a few months. Frequently, these efforts were
expended while holding down other full- or part-time employ-
ment.
Despite these difficult and perplexing challenges --
all of which were anticipated at the onset -- a great deal
of valuable work was performed. The recommendations con-
tained in this Report, if implemented, will result in real
and significant savings and other benefits to American
taxpayers whose hard work and personal sacrifices foot the
bill for these Federal programs and operations.
The PPSS Management office established three levels on
which to evaluate the recommendations' "supportability" on
their management merits:
o Category I -- Fully substantiated and defensible.
Recommendations in this category are,
in the opinion of the Task Force,
convincing and deserving of prompt
implementation.
o Category II -- Substantially documented and
supportable. Recommendations in this
category may not be fully rationalized
or documented in the Report, but all
indications point to the desirability
and defensiblity of proceeding with
their implementation.
o Category III -- Potentiall_iustifiable and sup-
portable. Recommendations in this
category, while meritorious, are not
regarded as fully supported in the
Report, due to time, personnel
resources, and other constraints, but
are deemed worthy of further analysis
to determine the full extent of their
merit for implementation.
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The Task Force analyses of cost-saving opportunities in
the SBA were quite specifically focused. We sought a high
quality of substantiation for each of our recommendations.
We believe we have achieved that objective, that we brought
to bear sufficient private sector expertise to yield a
uniformly high level of supportability, and that each of our
recommendations is fully defensible and deserving of prompt
implementation. In the one case where time and resource
constraints precluded a high level of supportability, we
have identified the issue as an opportunity deserving
further study.
The matrix on the following pages summarizes the
three-year savings for each SBA recommendation. We should
point out, however, that the savings dollars developed are
only "planning estimates" (i.e., generally statistically
derived) and, as presented, are not of "budget quality."
Category/3 Year Saving(s)
Rev en ue(r)'gpportunities
($ millions)
Recommendation
SBA 1-1: Reduce maximum loan $ 90 (S) $ -0- $ -0-
guarantee percentage from 90
percent to 75 percent
SBA 1-2: Eliminate direct loans 23 (S)
SBA 1-3: Have banks, not SBA, 9 (S)
liquidate troubled loans
SBA 1-4: Utilize collection 118 (S)
services to work charged-off
loans .
SBA 1-5: Increase bank parti- 7 (S)
cipe on in special guaranty
programs
SBA 2-1: Improve monitoring of
district loans & processes
SBA 2-2: Cross train lending
officers
SBA 2-3: Improve timeliness and
reliability of data
SBA 2-4: Permit reporting to
credit bureau
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Category/3 Year Saving(s)
Revenue(r) Opportunities
millions)
Recommendation I II III
SBA 2-5: Develop clear criteria
for departments
SBA 2-6: Exercise right to deny
liability in certain cases
SBA 2-7: Set targets for charge-
offs and past-dues
SBA 3-1: Increase loan guaranty 60 (R)
fee from 1 to 2 percent
SBA 3-2: Transfer farm loans to
Farmers Home Administration (FmHA),
Department of Agriculture
SBA 4-1: Discontinue disaster 63 (S)
loans for insurable losses
SBA 5-1: Discontinue disaster 3 (S)
loans when other credit available
SBA 5-2: Transfer farm disaster
loans to FmHA
SBA 6-1: Reduce maximum surety 30 (S)
bond guaranty from 90 percent
to 85 percent
SBA 7-1: Increase charges to 16 (R)
surety bond contractors
SBA 8-1: Reduce idle funds for
Small Business Investment Corpor-
ations
SBA 9-1: Charge 1 percent user 4 (R)
fee on SBIC borrowings
SBA 10-1: Modify deposit schedule * (S)
with the Federal Reserve System
SBA 10-2: Eliminate payment 1 (S)
processing delays
SBA 10-3: Accelerate payment 3 (S)
forwarding to Denver Finance Center
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Recommendation
Category/3 Year Saving(s)
Revenue(R) Opportunities
($ millions)
I II III
SBA 10-4: Limit backdating of *
(S)
payments
SBA 11-1: Appoint Automated Data
Processing Steering Committee
SBA 11-2: Adopt and enforce formal -
software development methodology
SBA 11-3: Review cost justifica-
tion of Mass Storage Project
SBA 12-1: Combine certain regions 1
(S)
SBA 12-2: Close at least four 1
(S)
branch offices
SBA 12-3: Identify service area -
realignments
TOTAL COST SAVINGS (S) $ 350 $
TOTAL REVENUE GENERATIONS (R) 80
* Savings are less than $500,000
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THE REPORT RECOI-.MENDATIONS - A PERSPECTIVE
It is important that the recommendations in the FEMA
Task Force Report be placed in perspective. The PPSS
Management Office established three levels on which to
evaluate the recommendations "supportability" on their
management merits:
o Category I -- Fully substantiated and defen-
sible. Recommendations in this
category are, in the opinion of
the Task Force, convincing and
deserving of prompt implementa-
tion.
o Category II -- Substantially documented and
supportable. Recommendations in
this category may not be fully
rationalized or documented in the
Report, but all indications point
to the desirability of proceeding
with their implementation.
o Category III -- Potentially justifiable and sup-
portable. Recommendations in this
category, while meritorious, are
not regarded as fully supported in
the Report, due to time, personnel
resources, and other constraints,
but are deemed worthy of further
analysis to determine the full
extent of their merit for imple-
metation.
Because it was narrowly focused (primarily on disaster
assistance areas as described in the Executive Summary), the
PPSS FEMA Task Force was adequately staffed to develop
recommedations that are, in our judgment, fully supportable.
We believe we accomplished this by applying our professional
judgment to such data and information as exists. Where
additional study and analysis is needed beyond the scope of
the PPSS effort, we made appropriate recommendations.
While our recommendations do not speculate on the
outcome of further analysis, the Task Force did make
reasonable assumptions on possible future actions when
preparing savings estimates. These estimates are, there-
fore, of a "plannning" quality (i.e., indicators of a
reasonably expected magnitude of savings), rather than of a
"budget" quality.
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Recommendation
Category/3 Year Savings/
Revenue 0 portunities
( millions)
I II III
FEMA 1: Make National Flood $ 660 $-0- $-0-
Insurance Program self-sustaining
FEMA 2: Eliminate disaster- 273
assistance grants for insurable
losses
FEMA 3: Eliminate the U.S. Fire 9
Administration
FEMA 4: Improve strategic stock-
pile management
TOTAL SAVINGS $ 942
The following matrix summarizes the three-year
savings for each FEMA issue:
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
Gerard Ingenthron
Monsanto Company
St. Louis, MO
(314) 694-1000
Jim DiClerico/Murray Sanders
The President's Private Sector
Survey on Cost Control
(202) 466-5170
BUSINESS GROUP'S COST CONTROL FINDINGS FOR DOE/FERC/NRC
COULD REACH $2.8 BILLION
WASHINGTON, April 5 -- The President's Private Sector Survey
on Cost Control in the Federal Government (PPSSCC) today made public a
preliminary task force report on the Department of Energy, Federal
Energy Regulatory Commission and Nuclear Regulatory Commission
(DOE/FERC/NRC) containing proposed cost savings, over three years, of
at least $2.8 billion. These recommendations will be considered on
April 15th by a Subcommittee of the Survey's Executive Committee
chaired by J. Peter Grace, chairman of W. R. Grace & Co. of New York,
for possible submission to the President.
The PPSSCC DOE/FERC/NRC Task Force was headed by Roger
Milliken, president and chief executive officer of Milliken & Co. of
Spartanburg, SC, and John W. Hanley, chairman and chief executive
officer of Monsanto Company of St. Louis.
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
"Of the three-year total of $2.8 billion of recommended
savings, $2.3 billion are fully supported by adequate documentation
and another $505.7 million are partially supported," Mr. Grace said.
He also noted that $5.4 million in savings over a three-year period
require further study.
"Besides the recommended ways to save money," the Private
Sector Survey chairman said, "there are recommendations which we
believe could result in revenue enhancement in the amount of $1.2
billion."
Mr. Grace cautioned that in all of the PPSSCC work estimated
savings are more of a "planning" quality and not of a precise "budget"
quality.
* 1 #
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT FOR THE DEPARTMENT OF ENERGY
Media Contacts:
Gerard Ingenthron
Monsanto Company
St. Louis, MO
(314) 694-2883
Jim DiClerico/Murray Sanders
The President's Private Sector
Survey on Cost Control
(202) 466-5170
Department of Energy
Tas Force co--c-Fairs
John W. Hanley
Chairman and Chief
Executive Officer
Monsanto Company
Roger Milliken
President and Chief
Executive Officer
Milliken and Co.
Project Manager
Walt Pettiss
Spartanburg, SC
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
THE REPORT RECOMMENDATIONS - A PERSPECTIVE
It is vitally important that the recommendations in
PPSS Task Force Reports be placed in perspective. They are
--the product of an unprecedented and wide-ranging survey that
was performed in a politically-charged atmosphere by private
sector executives and specialists whose services were
volunteered - often on a part-time basis. This staff had
the formidable task of bringing their expertise to bear on
largely unfamiliar and complex Federal operations in the
short span of a few months. Frequently, these efforts were
expended while holding down other full or part-time
employment.
Despite these difficult and perplexing challenges - all
of which were anticipated at the onset - a great deal of
valuable work was performed. The recommendations contained
in this Report, if implemented, will result in real and
significant savings and other benefits to American taxpayers
whose hard work and personal sacrifices foot the bill for
these Federal programs and operations.
Each Task Force has sought to be realistic about the
recommendations reported. The great majority of them, we in
the PPSS Management Office believe, are fully substantiated.
However, it would be misleading for us to leave the impres-
sion that each and every recommendation is rooted in a
uniformly high level of research, analysis, and substan-
tiation.
The press of time, other business commitments, lack of
adequate resources, and other constraints did not always
permit the luxury of achieving this desired uniformity.
As a result, and to promote a realistic expectation of
recommendations reported, the Management office has
evaluated the "supportability" of the recommendations on
their management merits and has grouped them into three
categories.
0 Category I -- Fully substantiated and defensible.
Recommendations in this category
are, in the opinion of the Task
Force, convincing and deserving of
prompt implementation.
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
o Category II -- Substantially documented and
supportable. Recommendations in
this category may not be,fully
rationalized or documented in this
Report, but all indications point
to desirability and defensibility
of proceeding with their
implementation.
o Category III -- Potentially justifiable and
supportable. Recommendations in
this category, while meritorious,
are not regarded as fully supported
in the Report, due to time,
personnel resources, and other
constraints, but are deemed worthy
of further analysis to determine
the full extent of their merit for
implementation.
These category descriptors do not take into account
political, social or economic conditions which may alter the
supportability for implementing these recommendations.
Accordingly, by grouping the recommendations along the above
categories, it is possible to assess more effectively the cost
savings that can be expected. This analysis permits summary
estimates of: (1) firm, (2) probable, and (3) potential savings
opportunities, while recognizing that the proposed savings
dollars themselves are of a "planning estimate" quality (i.e.,
generally statistically derived) and not yet of a "budget
quality".
The Report Recommendations - A PPSS Management Office Assessment
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in the
matrix on the following pages:
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
#5E
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Murray Sanders/Chris Tofalli
-The President's Private Sector
Survey on Cost Control
(202) 466-5170
PRESIDENTIAL ADVISORY GROUP OUTLINES $2.3 BILLION IN
SAVINGS FOR EDUCATION DEPARTMENT
WASHINGTON, June 3--The Department of Education can achieve
cost savings of approximately $2.3 billion over a three-year
period without reducing financial aid or services to the academic
community or students, according to a report issued today by the
President's Private Sector Survey on Cost Control in the Federal
Government (PPSSCC).
These recommendations will now be considered on June 13th by
a Subcommittee of the Executive Committee chaired by J. Peter
Grace, chairman of W. R. Grace & Co., for possible submission to
the President.
The Department of Education task force was co-chaired by
Spencer F. Eccles, chairman, president and chief executive
officer of First Security Corp. of Salt Lake City, Utah; Alfred
H. Kingon, former editor-in-chief of Financial World magazine of
1850 K Street, N.W. ? Suite 1150_t Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
New York; Nathan R. Owen, chairman and chief executive officer of
General Signal Corporation of Stamford, Connecticut; Robert H.
Willis, chairman and president of Connecticut Natural Gas
Corporation of Hartford.
The Education Department maintains a highly visible and
active position as a financial institution, yet it lacks
experienced financial managers, staff, and automated data
processing support capabilities of successful commercial banks.
Among its many recommendations, the task force proposes the
consolidation of the National Direct Student Loan and the
Federally Insured Student Loan programs into the Guaranteed
Student Loan (GSL) program which will result in more efficient
administration of student loans with lower default rates and
interest savings in excess of $70 million over three years.
It also reported that the Department's cash flow position
can be significantly improved and interest savings of over $500
million in three years achieved by modifying the GSL program so
that loan payments to students are made in increments as required
during the course of the year, rather than in a lump sum.
Additional changes in financial policies and management
procedures are recommended by the task force. The current
automated data processing systems are fragmented throughout the
-2-
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
Department with the result that existing resources are not used
effectively. Some systems are more than ten years old. These
systems are not adequate to receive and process information
efficiently for the payment of grants, contracts and loans.
Recommendations by the Task Force to improve financial management
policies and procedures, as well as ADP systems enhancements,
could result in three year savings of $782 million.
Of the $25 billion in outstanding student loans, almost 10
percent is in the default. In the Direct Loan program, the
Department is hampered in collections because of poor data
submitted by the affected schools. As many as 55,000 loans lack
loan amounts, loan dates, amounts repaid, or even the social
security number of the borrower. In the GSL program the
Department does not learn about defaults under the current system
until a demand is made on the government as guarantor;; this can
be as long as two years from the time of default. The Task Force
recommends improved procedures which could recover in excess of
$60 million over three years.
"Of the three-year, total of $2.3 billion in recommended
savings, $2 billion are fully substantiated by adequate
documentation, and another $0.3 billion are partially
substantiated," Mr. Grace said.
-3-
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Mr. Grace cautioned that in all of the PPSSCC work,
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
CONTACTS:
-Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
DEFENSE DEPARTMENT PANEL PROJECTS $45 BILLION IN COST SAVINGS
WASHINGTON, June 30--The Office of the Secretary of
Defense can achieve three-year cost savings of up to $44.7
billion, "without diminishment of the defense program," through a
wide-ranging series of recommendations released today by a task
force of the President's Private Sector Survey on Cost Control in
the Federal Government (PPSSCC).
It should be noted however that some of the
recommendations would take several years to be implemented, and
the achievement of 80 percent of the savings will require some
action by Congress.
These recommendations will be considered on July 13th by
a Subcommittee of the Executive Committee chaired by J. Peter
Grace, chairman of W. R. Grace & Co., for possible submission to
the President.
The office of the Secretary of Defense Task Force was
co-chaired by Robert A. Beck, chairman and chief executive
officer of the Prudential Insurance Co.; Carter L. Burgess,
chairman, executive committee, Foreign Policy Association; James
E. Burke, chairman and chief executive officer, Johnson &
Johnson; and Carl D. Covitz, president, Landmark Communities, Inc.
(more)
1850 K Street, N.W. ? Suite 11SO ? Washington, D.C. 20006
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-2-
Among the major task force recommendations are the
reorganization of the executive structure of the Defense
Department itself; improvement in the weapons acquisition
function; formation of a commission to study base realignments
and closures; redesign of Defense Department retirement programs
and consolidated management of the entire military health care
system.
The task force said that if its recommendations were to
be fully implemented, average annual savings of about $19 billion
would ensue.
"Almost 40 percent of the recommended savings can be
derived from improved management of the weapons acquisition
process," according to the task force report.
Throughout the acquisition system in DOD, there are
major overlaps of function in the office of the Secretary of
Defense, arid the Services, which make the process of acquiring
major weapons more costly and more time consuming than necessary.
The task force made nine recommendations to improve the
weapons acquistion process, including consolidation of the
function itself. Discipline in limiting overly-rigorous military
specifications and encouraging greater use of common parts will
also yield very significant savings, the report noted. So, too,
will simplification of existing regulatory constraints.
(more)
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
-3-
Included in the recommendations for improved management
is the creation of a Defense Executive Office to include the
Secretary of Defense, the Service Secretaries, the Chairman of
the Joint Chiefs of Staff, and the Deputy Secretary of Defense.
The task force noted, "Placing top DOD officials in a
coordinating role with the Secretary of Defense will strengthen
the DOD wide decision-making process, provide better
representation of individual Service views at the top of the
organization, and establish a base from which to achieve better
unified decisions and actions among the Services."
The Department of Defense employs three million persons
and its annual budget (1983E) is almost $240 billion.
On the topic of military base realignments, the task
force noted that "the cost of maintaining unnecessary bases
ranges from $2 billion to $5 billion."
The report added, "Since 1968, the DOD worldwide
military and civilian employee population decreased from, five
million to three million. Some progress was made early in the
ensuing period with respect to base realignments and closures,
but the effort has virtually dried up."
It does not appear coincidental, the report continued,
"that such economies stopped in the mid-1970s, after Congress
enacted legislation requiring DOD to prepare detailed studies of
base closings and realignments, with advance notice to Congress
and the public of proposed studies, and providing for
Congressional review of the completed studies before
implementation."
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
-4-
The task force is recommending that the President
appoint an independent bipartisan commission to make a thorough
study of the base realignment problem. It suggests the
commission have substantial representation of retired senior
military officers.
The task force added that, in addition to making
specific recommendations on base realignments, the commission
should be charged with the responsibility of determining the
extent to which non-military considerations (i.e., political
pressures, broadly defined) interfere with rational,
cost-effective military decisions.
Focusing its attention on military retirement plans, the
task force observed that "retirement pay for military personnel
is rapidly becoming unaffordable for the nation. A system that
starts retirement pay as early as age 37, with benefits (after 20
years of service) equal to half of terminal base pay or more,
generates an enormous outlay for DOD. Given the expected life
span of a 37-year old retiree, it is probable that the total
amount he or she receives in retirement pay will exceed the total
received for active duty compensation, even before allowances for
inflation."
The task force made four retirement recommendations
which would generate $6.9 billion in savings during the first
three years that savings could be achieved. They include raising
the number of years at which full retirement benefits are
(more)
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
-5-
collectible from the present 20 years to 30, while providing
reduced benefits for those who choose to start collecting
earlier. In addition, the task force recommended improving
vesting provisions with vesting occurring after 12 years instead
of 20. Alternatively, an earned income offset to retirement
income, similar in concept to the Social Security earned income
offset, could be instituted for those who earn more than a
threshold amount. Under the alternative, the benefits of those
who cannot work, or choose to fully retire, would not change.
The task force closely scrutinized the Department of
Defense Health Care programs and concluded the DOD should
consolidate military health care management under a Defense
Health Agency, which should be responsible for administering and
developing policy for the military health care system.
The task force also recommended that the DOD should
introduce more effective cost containment measures in the
military health care system and make modifications to the
Civilian Health and Medical Program of the Uniformed Services
(CHAMPUS).
The task force emphasized that the premise underlying
all of its 40 recommendations "is that the nation's preparedness
level be maintained or improved, while unnecessary costs of
delivering that level of preparedness be eliminated. The
suggestions made are intended to strenghten military readiness by
more efficient use of those dollars which are made available for
the national defense."
(more)
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
"Of the three-year total of $44.7 billion in savings and
revenue generation, $39.7 billion are fully substantiated by
adequate documentation, and another $5.0 billion are partially
substantiated," Mr. Grace said.
Mr. Grace cautioned that in all of the PPSSCC work,
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT ON THE OFFICE OF THE SECRETARY OF DEFENSE
The Office of the Secretary
Media Contacts: Task Force Co-Chairs
Bill Tremayne Robert A. Beck
Prudential Life Insurance Co. Chairman & CEO
(201) 877-7700 Prudential Life Insurance Co.
Murray Sanders/Chris Tofalli James Burke
The President's Private Sector Chairman & CEO
Survey on Cost Control Johnson & Johnson
(202) 466-5170
Carter L. Burgess
Roanoke, VA
Carl 0. Covitz
President
Landmark Communities, Inc.
Project Manager
Bill Tremayne
Prudential Life Insurance Co.
The Report Recommendations -- A Perspective
It is vitally important that the recommendations in
this Task Force Report be placed in perspective. -They are
the product of an unprecedented and wide-ranging survey
that was performed by private sector executives and
specialists whose services were volunteered. This
staff had the formidable task of bringing their
expertise to bear on largely unfamiliar and complex
Federal operations in the short span of a few months.
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
Despite these difficult and perplexing challenges --
all of which were anticipated at the onset -- a great deal
of valuable work was performed. The recommendations con-
tained in this Report, if implemented, will result in real
and significant savings and other benefits to American tax-
payers whose hard work and personal sacrifices foot the
bill for these Federal programs and operations.
We have sought to be realistic about the recommenda-
tions reported. The great majority of them, we believe,
are fully substantiated. However, it would be misleading
for us to leave the impression that each and every recom-
mendation is rooted in a uniformly high level of research,
analysis, and substantiation. The press of time, other
business commitments, lack of adequate resources, and other
constraints did not always permit the luxury of achieving
this desired uniformity.
As a result, and to promote a realistic expectation of
recommendations reported, we have evaluated the supportabil-
ity of the recommendations on their management merits and
have grouped them into three categories.
o Category I -- Fully substantiated and defensible.
Recommendations in this category
are, in the opinion of the Task
Force, convincing and deserving of
prompt implementation.
o Category II -- Substantially documented and sup-
portable. Recommendations in this
category may not be fully rational-
ized or documented in the Report,
but all indications point to the
desirability and defensibility of
proceeding with their implementa-
tion.
o Category III -- Potentially justifiable and s22-
portable. Recommendations in this
category, while meritorious, are
not regarded as fully supported in
the Report, due to time,-personnel
resources, and other constraints,
but are deemed worthy of further
analysis to determine the full
extent of their merit for imple-
mentation.
These category descriptors do not take into account
political, social, or economic conditions which may alter the
supportability of these recommendations for implementation.
Accordingly, it is possible, by grouping the recommendations
along the above categories, to assess more effectively the
cost savings that can be expected. This analysis permits
summary estimates of: (1) firm, (2) probable, and (3) poten-
tial savings.
The Report Recommendations -- An Assessment
Based on the above perspective and categorization, an
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
Revised as of June 10, 1983
FEDERAL
DATE REPORT IN
SUBCOMMITTEE
REPORT REGISTER NOTICE
PUBLIC READING ROOM
MEETING DATE
Commerce 3/31
4/5
4/15
USDA 3/31
4/5
4/15
DOE-NRC 3/31
4/5
4/15
HHS-0ther, I-k*.A--(-T, 3/31
4/5
4/15
EPA/SBA/FEMA 3/31
4/5
4/15
Personnel 3/31
4/5
4/15
DOT 4/15
4/18
5/2
HHS-Health _ HeFA- P45 4/15
4/18
5/2
FAM 4/15
4/18
5/2
HUD 4/15
4/18
2
5/
Interior 4/15
4/18
5/2
---------------------------------------------------------------------------
Hospital
Management
4/30
5/6
5/17
Federal
Construction
4/30
5/6
5/17
Labor
4/30
5/6
5/17
Real Property
4/30
5/6
5/17
Veterans Adminis.
4/30
5/6
5/17
---------------------------------------------------------------------------
Boards/Commissions-
Business
4/30
5/16
5/26
Boards/Commissions-
Banking
5/11
5/16
5/26
User Charges
5/11
5/16
5/26
Low Income Standards
5/11
5/16
5/26
State/ /VS:A/Prib
5/11
5/16
5/26
Land/Facilities
5/11
5/16
5/26
---------------------------------------------------------------------------
HHS-SSA
5/11
6/3
6/13
Education
5/24
6/3
6/13
Procurement
5/24
6/3
6/13
ADP cS---
5/24
6/3
6/13
Federal Mgmt. P
5/24
6/3
6/13
---------------------------------------------------------------------------
Air Force 6/27
6/30
7/13
Army 6/27
6/30
7/13
OSD 6/27
6/30
7/13
Navy 6/27
6/30
7/13
Treasury 6/27
6/30
7/13
Federal Feeding 6/27
6/30
7/13
R&D 6/2.7
6/30
7/13
Privatization 6/27
6/30
7/13
Justice 6/27 .~
Management Off ice'. ti lA,+-"Ng 1- ~,~31as1+'Nq
6/30
7/13
Selected Issues., 1AA- /4 Ti~f1 Fc M
-------------------------------------- Q
6/30
7/13
?
PRESIDENT'S REPORT ?
9/12
?
o y
The Press Briefing on 6/30 will be held at 11 a.m. in room 683-0, Commerce
Department. The Subcommittee scheduled for 7/13 will be at 10 a.m. in the
Commerce Department Auditorium.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
Allen Stoecker
Mutual Benefit Life Insurance
Newark, NJ
(201) 481-8441
Jim DiClerico/Murray Sanders
The President's Private Sector
Survey on Cost Control
(202) 466-5170
BUSINESS PANEL CONSIDERING COST REDUCTION PLAN
FOR COMMERCE DEPARTMENT
WASHINGTON, April 5 -- The President's Private Sector Survey
on Cost Control in the Federal Government (PPSSCC) today made
public a task force report on the Commerce Department containing
proposed cost savings, over three years, of at least $198
million. These recommendations will be considered on
April 15th by a Subcommittee of the Survey's Executive Committee
chaired by J. Peter Grace, chairman of W. R. Grace & Co. of New
York, for possible submission to the President.
The PPSSCC Commerce Department Task Force, was headed by
Amory Houghton, chairman and chief executive officer of Corning
Glass Works, Corning, N.Y. and Robert V. Van
Fossan, chairman and chief executive officer of Mutual Benefit
Insurance Company, Newark, N.J.
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
"Of the three-year total of $198 million of recommended
savings $145 million are fully supported by adequate
documentation and another $53 million are partially supported."
Mr. Grace also said $6.5 million in savings over a three-year
period require further study.
"Besides the recommended ways to save money," the Private
Sector Survey chairman said, "there are recommendations which we
believe could result in revenue enhancement in the amount of $533
million.
Mr. Grace cautioned that in all of the PPSSCC work estimated
savings are more of a "planning" quality and not of a precise
"budget" quality.
Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT FOR COMMERCE DEPARTMENT
Media Contacts:
Allen Stoecker
Mutual Benefit Life Insurance
Newark, New Jersey
(201) 481-8441
Jim DiClerico/Murray Sanders
The President's Private Sector
Survey on Cost Control
(202) 466-5170
Commerce Dept. Task Force
Co-Chairs
Amory Houghton
Chairman and Chief Executive
Officer
Corning Glass Works
Robert V. Van Fossan
Chairman and Chief Executive
Officer
Mutual Benefit Life Insurance
Company
Project Manager:
George Bennett
Braxton Associates, Inc.
1 State Street
Boston, MA 023.09
(617) 367-7070
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
THE REPORT RECOMMENDATIONS -- A PERSPECTIVE
It is vitally important that the recommendations in
this Task Force Report be placed in perspective. They are
the product of an unprecedented and wide-ranging survey that
was performed in a politically-charged atmosphere by private
sector executives and specialists whose services were volun-
teered--often on a part-time basis. This staff had the
formidable task of bringing their expertise to bear on
largely unfamiliar and complex Federal operations in the
short span of a few months. Frequently, these efforts were
expended while holding down other full or part-time employ-
ment.
Despite these difficult and perplexing challenges --
all of which were anticipated at the onset -- a great deal
of valuable work was performed. The recommendations con-
tained in this Report, if implemented, will result in real
and significant savings and other benefits to American
taxpayers whose hard work and personal sacrifices foot the
bill for these Federal programs and operations.
We have sought to be realistic about the recommen-
dations reported. The great majority of them, we believe,
are fully substantiated. However, it would be misleading
for us to leave the impression that each and every recom-
mendation is rooted in a uniformly high level of research,
analysis, and substantiation. The press of time, other
business commitments, lack of adequate resources, and other
constraints did not always permit the luxury of achieving
this desired uniformity.
As a result, and to promote a realistic expectation of
recommendations reported, we have evaluated the "support-
ability" of the recommendations on their management merits
and have grouped them into three categories.
- Category I -- Fully Substantiated and Defensible.
Recommendations in this category are,
in the opinion of the Task Force,
convincing and deserving of prompt
implementation.
- Category II -- Substantially Documented and
Supportable.
Recommendations in this category may
not be fully rationalized or docu-
mented in the Report, but all indi-
cations point to the desirability and
defensibility of proceeding with
their implementation.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
Category III -- Potentially Justifiable and
Supportable.
Recommendations in this category,
while meritorious, are not regarded
as fully supported in the Report, due
to time, personnel resources, and
other constraints, but are deemed
worthy of further analysis to deter-
mine the full extent of their merit
for implementation.
These category descriptors do not take into account
political, social or economic conditions which may alter the
supportability for implementating these recommendations.
Accordingly, it is possible, by grouping the recommendations
along the above categories, to more effectively assess the
cost savings that can be expected. This analysis permits
summary estimates of: (I) firm, (II) probable, and (III)
potential savings.
The Report Recommendations -- An Assessment
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in
the matrix on the following pages:
Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
U)
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Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
m
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
D
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
COST SAVING PANEL RECOMMENDS $9.4 BILLION IN SAVINGS
FOR GOVERNMENI BANKING RELATED COMMISSIONS
WASHINGTON, May '16--Thirteen banking regulatory
agencies covered in a task force report made public today can
save approximately $9.4 billion over a three-year period
according to the President's Private Sector Survey on Cost
Control in the Federal Government (PPSSCC). These
recommendations will be considered on May 26th by a
Subcommittee of the Executive Committee chaired by
J. Peter Grace, chairman of W. R. Grace & Co., for possible
submission to the President.
The Boards/Commissions-Banking Task Force was
co-chaired by Fletcher Byrom, formerly chief executive officer
of Koppers Corp. Inc. of Pittsburgh; J. T. Tyler McConnell,
chairman and chief executive officer of Delaware Trust Company
of Wilmington; and Robert T. Powers, chairman of NALCO Chemical
of Oak Brook, Illinois.
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
-2-
The Boards/Commissions-Banking Task Force reviewed
thirteen regulatory agencies, including the Bank Regulation
Section of the Federal Reserve System, the Federal Deposit
Insurance Corporation, the Federal National Mortgage
Association, the Farm Credit Administration, the U.S. Synthetic
Fuels Corporation, and the Export/Import Bank.
The most significant issue identified by the Task
Force was the privatization of the quasi-governmental agencies.
These agencies, which are privately owned (e.g., the Farm
Credit Bank System), were established many years ago when the
industries they serve, and the U.S. economy, were different.
.However, they still retain certain privileges granted at their
founding, including favored tax status and the ability to
borrow from the Federal Financing Bank (FFB), the Treasury, or
in the public markets with agency status.
The report recommends initiating a process designed to
encourage the agencies to seek full private status with enough
transition time for all affected to adjust. It also proposes
that such quasi-private bodies be subject to some form of
income tax, and be subject to a user-charge for the use of
agency status on borrowings from the Treasury or FFB.
Citing the dramatically changing environment of the
financial services industry because of acquisitions and
diversification, and the entry of non-traditional banking
organizations, the report recommends consolidating the
commercial bank regulatory and examination bodies, including
(more)
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
-3-
the regulatory arm of the Federal Reserve System and the
Federal Deposit Insurance Corporation. The report states that,
with minor exception, the mission of all these bodies is the
same, differing primarily only in the corporate structures of
the banks upon which they focus.
The report also concluded that because credit unions
now function like other financial institutions and compete
directly with them, the report recommends they be comparably
taxed and that the Central Liquidity Facility be dissolved
because credit unions have access to the Federal Reserve for
liquidity purposes.
With respect to the Railroad Retirement Board (RRB),
the report recommended the tax rate for Railroad Unemployment
and Sickness Insurance be increased to adequately fund the
system. Also, the Tier 2 element of the RRB retirement system
(the only private industry pension system that is federally
sponsored, controlled and subsidized) should be privatized and
treated the same as other private retirement programs,
according to the report.
"Of the three-year total of $9.4 billion in savings,
$9.2 billion are fully substantiated by adequate documentation,
and another $200 million are partially substantiated,"
Mr. Grace said.
Mr. Grace cautioned that in all of the PPSSCC work,
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT ON BOARDS/COMMISSIONS-BANKING
Media Contacts:
Don Caldwell
Arthur Young and Company
[phone]
Murray Sanders/Chris
Tofalli
The President's Private
Sector Survey on Cost
Control
[phone]
Boards/Commissions-Banki:
Task Force Co-Chairs
J. T. Tyler McConnell
Chairman & Chief Executive Officer
Delaware Trust Company
Robert T. Powers
Chairman
NALCO Chemical
Fletcher Byrom
Dillon, Colorado
Project Manager
Don Caldwell
Arthur Young and Company
It is vitally important that the recommendations in
this Task Force Report be placed in perspective. They are
the product of an unprecedented and wide-ranging survey that
was performed in a politically charged atmosphere by private
aector executives and specialists whose services were volun-
teered -- often on a part-time basis. This staff had the
formidable task of bringing their expertise to bear on
largely unfamiliar and complex Federal operations in the
span of a few months. Frequently, these efforts were
expended while holding down other full- or part-time
employment.
Despite these difficult and perplexing-challenges all of which were anticipated at the onset -- a great deal
of valuable work was performed. The recommendations con-
tained in this Report will result, if implemented, in real
and significant savings and other benefits to American tax-
payers who pay for these Federal programs and operations.
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 ." Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
We have sought to be realistic about the recommenda-
tions reported. The great majority of them, we believe, are
fully substantiated. However, it would be misleading for us
to leave the impression that all recommendations are rooted
in a uniformly high level of research, analysis, and sub-
stantiation. The press of time, other business commitments,
lack of adequate resources, and other constraints did not
always enable us to achieve this desired uniformity.
The President's Private Sector Survey Management Office
established three levels on which to evaluate the recommen-
dations' "supportability" on their management merits:
o Category I -- Fu11y substantiated and defensible.
Recommendatiorisrn this category
are, in the opinion of the Task
Force, convincing and deserving of
prompt implementation.
o Category II -- Subs_tantially documented and sup-
Sortable. Recommendations in this
category may not be fully ration-
alized or documented in the Report,
but all indications point to the
desirability and defensibility of
proceeding with their
implementation.
o Category III -- Potentially justifiable and sup-
portable. Recommendations in this
category, while meritorious, are not
regarded as fully supported in the
Report, due to time, personnel re-
sources, and other constraints, but
are deemed worthy of further anal-
ysis to determine the full extent of
their merit for implementation.
These category descriptors do not take into account
political, social, or economic conditions which may alter
the supportability of these recommendations for implementa-
tion. Accordingly, it is possible, by grouping the recom-
mendations along the above categories, to assess more effec-
tively the cost savings that can be expected. This analysis
permits summary estimates of firm, probable, and potential
savings.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
The ReQor_, t Recommendations _ 7-n llsaessment
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in
the following matrix:
Category/3-year Savings/Revenue/
Cash AccelerationOpportunities (cont'd)
m lions
Bank Issues
I
II _
III
1
$ 324.1
(R)
2
30.1
(S)
3
262.0
(CA)
54.0
(S)
$ 132.4 (R)
4
5
3,194.0 (R)
6
*
7
8
1.7 (S)
9
10
331.0
(R)
11
1,442.0
(R)
12
1,236.2
(S)
13
546.1
(R)
259.0
(CA)
14
85.8
(S)
15
26.2
(S)
16
23.9
(S)
3.3 (.S)
17
18
19
20.0 (S)
20
21
10.9 (S)
22
*
23
379.0 (R)
5.0 (S)
24
25
*
* Management improvement, not quantified.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
Category/3-year Savings/Revenue/
Cash Acceleration 0 ortunities (cont'd)
26
mi iona
II
$ 1.5 (S)
27
57.6 (S)
28
24.3 (S)
29
7.2 (S)
30
6.9 (S)
31
3.3 (S)
32
33
*
34
54.2 (R)
35
*
0.4 (6)
36
6.6 (R)
37
*
38
648.1 (R)
39
*
40
724.2 (R)
41
18.1 (S)
Total Cost
Savings (S)
by Category
$1,559.1
$ 7,642.7 139.2
Total Revenue
Generation (R)
by Category
Total Cash
Accelera-
tion (CA)
by Category
$521.0
$ 9,722.8 $ 196.5
* Management improvement, not quantified.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
-Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
FEDERAL BUSINESS RELATED BOARDS AND COMMISSIONS
CAN ACHIEVE $3.3 BILLION IN SAVINGS ACCORDING TO
PRIVATE SECTOR SURVEY FINDINGS
WASHINGTON, May 16--Improvements in the Federal
Government's business related boards and commissions can be
achieved with potential savings of $3.3 billion, according to a
task force report released today by the President's Private
Sector Survey on Cost Control in the Federal Government
(PPSSCC).
These recommendations will be considered on May 26th
by a Subcommittee of the Executive Committee chaired by
J. Peter Grace, chairman of W. R. Grace & Co., for possible
submission to the President.
The Boards/Commissions-Business Task Force wis
co-chaired by George H. Dixon, president of First Bank Systems,
Inc. of Minneapolis; Edward ponley, chairman and chief
executive officer of Air Products & Chemicals, Inc. of
Allentown, Pennsylvania; Robert A. Pritzker, president of The
Marmon Group of Chicago; John M. Regan, chairman and chief
executive officer of Marsh & McLennan Companies, Inc.; Thomas
1. Storrs, chairman
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
of NCNB Corp. of Charlotte, North Carolina; and Rawleigh
Warner, chairman of the Board and chief executive officer of
Mobil Corporation of New York.
This task force reviewed the operations of the United
States Postal Service (USPS), the Tennessee Valley Authority
(TVA), eight regulatory commissions, and various Federal
insurance programs.
Recommendations for the USPS include changes in
planning, organizational structure and systems. Citing various
methods for the USPS to stay competitive with the private
sector, the report recommends devoting more attention to
product management, account management and new product
research. Marketing tools are potential methods for boosting
acceptance. In addition, implementation of the ZIP+4 program
could greatly increase savings.
Continuation and acceleration of automated mail
processing and delivery systems, in addition to better planning
of transportation routes, could also help realize large savings.
Various recommendations were made in the Federal
insurance programs reviewed, including converting the Federal
Riot Insurance and Federal Crime Insurance programs to private
sector operation. This will improve Federal finances without
increasing costs or decreasing benefits to consumers.
(more)
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
Also recommended were management improvements to
decrease the number of defaults in the Federal Housing
Authority's hospital mortgage program and applying private
sector mortgage practices to the operation of the Mutual
Mortgage Insurance Fund.
The report also proposes eliminating duplications of
effort at the TVA's Office of Engineering Design and
Construction and phasing in over three years a series of user
charges for services currently provided under the National
Fertilizer Development Program at TVA expense.
Regarding the eight Federal regulatory commissions
studied, the task force recommends establishing user fees to
help recapture costs at the Federal Communications Commission.
In addition, management improvements which can help save
costs. Also, the report cites revenue generation methods for
the Commodity Futures Trading Commission by collecting
transaction fees.
In addition to recommending improvements in the
organizations of these agencies, the survey also notes that any
savings realized by the agencies as a result of these
reconunendations be offset by reductions in the Federal funds
provided by the U.S. Treasury. If not, the PPSSCC task force
states that savings will result to users of agency services,
but not to the Government and taxpayers.
(more)
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"Of the three-year total of $3.3 billion in savings
and revenue generation, $2.4 billion are fully substantiated by
adequate documentation, and another $904 million are partially
substantiated.," Mr. Grace said.
Mr. Grace cautioned that in all of the PPSSCC work,
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
TASK FORCE ON BOARDS/COMMISSIONS-BUSINESS
Media Contacts:
Bill Duggan
Marsh & McLennan Companies, Inc.
[phone]
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
Task Force on Boards/
Commissions-Business
Co-Chairs
George Dixon
President
First Bank System, Inc.
Edward Donley
Chairman and Chief
Executive Officer
Air Products & Chemicals, Inc.
Robert Pritzker
President
The Marmon Group
John M. Regan
Chairman and Chief
Executive Officer
Marsh and McLennan
Companies, Inc.
Thomas Storrs
Chairman
NCNB Corporation
Rawleigh Warner, Jr.
Chairman of the Board and Chief
Executive Officer
Mobil Corporation
Project Manager
Bill Duggan
Marsh and McLennan Companies
1850 K Street, N.W. ? Suite 1150 0 Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
It is vitally important that the recommendationsinre
this Task Force report be placed in perspective. They
the product of an unprecedented and wide-ranging survey that
private
.was performed in a politically-charged atmosphere by thsector executives and specialists whose servicesf had volun-
teered -- often on a part-time basis.
formidable task of bringing their expertise to bear on
largely unfamiliar and complex Feuenaoperations inhe
short span of a few months. Frequently,
these seteffforts s were
expended while holding down other full- or p
ment.
Despite these difficult and perplexing challenges --
all of which were anticipated at the onset -- a great deal
of valuable performeti. he recommerendsatiultonins
tned
in
and significant savings and other benefits to American tax-
payers whose hard work and personal sacrifices foot the bill
for these Federal programs
We have sought to be realistic about the recommenda-
tions reported. The great majority of them, we believe, are
it would be misleading for
fully substantiated. However,
to leave the impression that each and every recommendation
is rooted in a uniformly iep9esslevel timereotherhbusinessis,
and substantiation .
commitments, lack of adequate resources, and other const-
raints raints did not always permit the luxury of achieving
desired uniformity.
As a result, and to promote a realistic expectation of
recommendations reported, we have evaluated the "support-
ability" of the recommendations three their management merits
and have grouped them into
0 Category I --
Fully_substantiated and defensible.
Recommendations in this category
are, in the opinion of the Task
Force, convincing and deserving of
prompt implementation.
o Category II -- Substantially documented and su por_
table. Re-commendations~n-th s
category may not be fully ration-
alizesd, or documented in the Report,
but all indican~odefensibility of
desirability
proceeding with their implementa-
tion.
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o Category III -- Potentially justifiable and support-
able. Recommendations nth s cate-
gory, while meritorious, are not
regarded as fully supported in the
Report, due to time, personnel re-
sources, and other constraints, but
are deemed worthy of further analy-
sis to determine the full extent of
their merit for implementation.
These category descriptors do not take into account
political, , social l or-economic
supportability for implementing these recommendations.
Accordingly, by grouping the recommendations along the above
categories, it is possible to assess Tmoreaeeffectively
lymihe
cost savings that can be expected.
summary estimates of: (1) firm, (2) probable, and (3)
potential savings opportunities, while recognizing that the
proposed savings dollars themselves are of a "planning
estimate" quality (i.e., generally statistically derived)
and not yet of a "budget quality."
The Report_Recommendations - An Assessment
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in
the following matrix:
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THREE--TEAR SAVINGS (S)/
REVENUE OPPORTUNITIES (R)
($ millions)
Mo. Issue Category ry I Category II . Category III
A. Civil Aeronautics Board (CAB)
1 Sunset Bead Count and Staffing $7.4 (S) $
2 Early'Sunset 3.1 (S)
3 Fitness Determinations 1.3 (S) 29.8 (S)
B.
Commodity Futures Trading Commission (CFTC)
1
Management Improvements NQ (
S)
2
User Foss 39.7 (
R)
C.
Consumer Product Safety Commission (CPSC)
1
Organization Study 3.8 (
S)
2
Administration Directorate Study
3
Automated Data Processing 0.9
(S)
4
Headquarters and Field Offices
D.
Federal Communications Commission (FCC)
1
Management Improvements
NQ (S)
2
Automated Data Processing
NQ (S)
3
User Charges
142.3 (R)
4
Adjudicating/Rule Making
NQ (S)
E
Federal Maritime Commission (FMC)
1
Commission Head Count and Staffing
3.1 (S)
2
Handling of Tariffs
NQ (S)
3
Processing of Agreements
NQ (S)
4
Certification and Licensing
NQ (S)
5
Deregulation of Domestic Offshore
F.
Shipping
Federal Trade Commission (FTC)
NQ (S)
1
Bureau of Economics Research
4.9 (S)
2
Office Consolidation
(1.3)(S)1/
3
Improved Coordination with the
4
Department of Justice
Management Improvements
NQ (S)
NQ (S)
(S)
5
Regional Offices
NQ
NQ (S)
6
Grade Escalation
1/ Average savings over 10-year period are $1.1 million per year.
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THEIR-TEAR SAVINGS ' (s) /
REVENUE OPPORTUNITIES (R)
(S millions)
I Category TI -
C
Category III
ate
e
I
1
ss_
C.
1
interstate Commerce Commission (ICC)
Organisation and Planning
NQ
(S)
NQ
(S)
2
bureau of Accounts
NQ
(S)
3
Bureau of Traffic
IQ
(S)
4
Commissioners and Support Staff
'
S
and Consumer
Office of Compliance
NQ
(S)
Assistance
NQ
(S)
6
Office of Proceedings
1.
Occupational Safety and Health
Review Commission (OSERC)
_
1
Merger of OSHEC and MSIOIC
0.0
0
1
(S)1/
(S)1/
2
Commission Paper Flow
.
3
Professional Staff Productivity
Subtotal Regulatory Commission
$205.2
$3.9
$31.8
1.
Insurance
1.
OPIC's Purchase of Reinsurance
of Reserves - OPIC
d
NQ NQ
(S)
2
equacy
A
(S)
15
0
3
Flood Insurance Program - FEU
.
4
Federal Crime Insurance - 31M
l Riot Reinsurance - TEMA
d
152( (S)
34..
(5)*
5
era
Fe
3.3 (S)
6
Sale and Delivery of Crop Insurance
NQ (S)
7
Financial Management System (FCIC)
NQ (S)
8
FCIC Premiums
9
Federal Mortgage Insurance for
IQ (S)
Hospitals (FHA-242)
2/
Savings for BUS-OSBRC are estimated to be $3.1 million over 3 years.
However. because BUS-OS)(RC 1 and 2 are not additive, only BUS-0SHRC
2 savings are included in this table.
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THREE-TEAR SAVINGS (S) l
pXVENUE OPPORTUNITIES (R)
I.
Issue
Insurance (Cont?d
Category I
(S millions)
Category
Category III
10
Mutual Mortgage Insurance Fund - 7BA
$22.8 (S)
11
FBA -.Mutual mortgage Insurance
Fund
13.2 (S)
12
Size of Reserves Needed for
Insurance and Guarantee Programs
NQ (S)
13
Risk Related Premiums
SQ (R)
NQ (S)
14
Loan Guarantees vs. Direct Lending
NQ (s)
15
FCIC Staffing Levels
J
Subtotal Insurance
Tennessee Valley Authority
$88.5 *
$303.2
$0.0
1
Engineering Design and Construction
$120.2 (S)
Program
m
22.2 (S)
2
TVA Financing Progra
bor Relations
d L
9 (S)
255..
3
4
a
Personnel an
*
Compensation and Benefits
(S)
NQ
5
Generating Plant Efficiency
lear)
d N
3.0 (S)
uc
(Coal-fired an
42.7 (S)
6
Coal Procurement
7
National Fertilizer Development
Program
83.8 (A)
S
8
Financial Reporting System
N
T..
Subtotal TVA
'United States Postal Service (USPS)
$297.8 $ 0.0 $0.0
1
Capital Financing
$ 6.8 (S)
2
Working Capital and Cash Float
Investments
168.8 (R)
3
Interest Income vs. Interest
Expense
110.5 (R)
NQ (S)
4
Net Income
60.1 (R)
S
Disbursement Costs
277.4 (S)
6
ZIP+4 Automation
d
7
Nondelivery of Correctly Addresse
Mail
30.4 (R)
(S)
0
220
8
. Mechanization
.
0 (S)
9
Presort Programs
22.
10
Air-to-Surface Diversion
NQ (S)
11
CAB 'Sunset
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THP!E-TEAR SAVINGS (S) /
REVENUE OPPORTUNITIES (R)
($ millions)
Category III
I
Category
Category
10.
L. U
nited-States Postal Service
(
USPS)(Cont't)
12 M
anagement Sciences Modelling
$178.7
(S)
for Transportation
r
$154.4 (S)
13 C
am
entral Delivery Prog
NQ
(S)
14 C
asing Trays
NQ
(S)
15 P
rogram Management
3.3
(S)
16
Delivery of Government Mail
h
17
Replacing Post Offices wit
272.4
(S)
8
Alternative Services
Mail Delivery Days
cin
d
R
NQ
(S)
1
g
u
e
onsibili
d Res
ty 6Q
19
p
purchasing Organisation an
ement
P
66.2
S)
20
21
rocur
Capital Equipment
Sale or Reuse of Surplus Equipment
1.8
8.7
( (S)
(S)*
22
Disposal of Excess Real Property
3.4
16.4
(S)
(CA)*
23
24
25
Current Procurement Programs
Project Evaluation
Marketing
NQ
NQ
(S)
(S)
NQ (S)
26
1 V.P. Commission
Review of tha Poata
NQ
(S)
27
Budget
Rate Setting Process
of Work Life
lit
NQ
NQ
(S)
NQ (S)
28
y
Qua
63.5
(S)
29
Grievance Procedures
(S)
30
Dual Filing by Grievants
327.4 (S)
31
Overtime
NQ
(S)
32
Personnel Levels
NQ
(S)
33
Wage Comparisons
NQ
(S)
34
Traditional vs. Standard Service
74.9
(S)
35
Transportation Contracting
165.8
(S)
36
Congract Stations
135.1
(S)
37
Pal
Sick Leave and Leave Without
251.6
(S)
38
(
Equal Employment opportunity EEO) Function
13.2
(S
39
Official Time
6
640
PS
$597.7
.
$
Subtotal LIS
TIME-YEAR SAVINGS (S
)/
REVENUE OPPORTUNITIES
(R)
$ millions)
IIII
Catego~
Category II
Category
Totals
8
31
$ 205.2
?
$ 3.9
.
$
0
Regulatory Boards and Commissions
88
5
$30$.2
$ 0.
.
Insurance 297.6
$ 0.0
$ 0.0
6
$640
TVA-
1e03
6
$5_ 97
.
_
..
LISPS $ 2395-1
$904.8
___
_
4
Grand Total
$607.3
$672.
S 1759.5
Total Savings
22
$ 0.0
Total Revenue Enhancements
$ 0.0
$ 0.0
Total Cash Accelerations
*Cash accelerations are not included in subtotals or totals.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
(202) 466-5170
UPDATING AUTOMATED DATA PROCESSING SYSTEMS IN THE
FEDERAL GOVERNMENT COULD SAVE AT LEAST $20 BILLION
OVER A THREE-YEAR PERIOD
WASHINGTON, June 3--The Federal Government is the single
largest user of data processing (ADP) systems in the world, with
over 6,000 general purpose systems (administrative systems such
as personnel, accounting, etc.) and almost 11,500 special purpose
systems (weapons, imbedded systems, etc.)
Despite the critical role of ADP in support of day-to-day
operations of the Federal Government and in processing claims,
benefits and paychecks for millions of Americans, the average age
of the Government's ADP system in 1980 was 6.7 years. According
to a report released today by The President's private Sector
Survey on Cost Control in the Federal Government (PPSSCC), most
private sector ADP specialists consider three years to be the
benchmark for functional obsolescence. The pervasiveness of
antiquated equipment is highlighted by the fact that although the
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
Federal Government was the acknowledged leader in using
state-of-the-art computer hardware and software in the 1960's,
approximately 50 percent of the Government's ADP inventory is now
so old that it can no longer be supported by the manufacturer and
must be maintained by specially trained Federal personnel at
additional costs.
The Report was prepared by the PPSSCC Task Force on
Automated Data Processing/Office Automation, which was co-chaired
by William Agee, former chairman of Bendix Corporation of
Southfield, Michigan; Joseph Alibrandi, president and chief
executive officer of Whittaker Corporation of Los Angeles; and
Donald E. Procknow, president of Western Electric Co. of New
York.
In undertaking its review, the PPSS Task Force on Automated
Data Processing/Office Automation found the following:
o The Social Security Administration is four- to six-weeks
behind in issuing new Social Security cards; has a
three-year backlog in posting retirement contributions;
and is unable to process 7.5 million new annual claims
applications on time or correctly.
o The cost of the Army's business-related ADP systems
($1.5 billion) can only be estimated because the Army
does not know how much it spends on ADP/OA, what kinds
-2-
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and numbers of computers it has, where they are located,
or whether they should be replaced.
o Approximately 20 percent of all tax returns for 1978
have not yet been entered into the IRS computer system.
The current estimates of deliquent accounts is $23.2
billion and growing, yet the IRS uses 20-year old
equipment which predates modern data base concepts, such
as random access and on-line storage.
In announcing the Task Force findings, J. Peter Grace,
Chairman of the PPSS Executive Committee and Chairman and Chief
Executive Officer of W.R. Grace & Co., noted that the Task Force
had identified specific recommendations which, if implemented
across the Government, could significantly improve the efficiency
and effectiveness of the Federal Government's ADP systems, with
three-year cost savings to the American taxpayers of more than
$20 billion over a three-year period.
0 The appointment by the President of a Federal
Information Resource Manager to oversee ADP/OA
operations throughout the entire Federal Government to
ensure the development and implementation of a
comprehensive system for ADP planning and management in
the Federal Government.
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o The appointment of qualified career professionals to
oversee ADP/OA management at each department and agency
and the granting of increased procurement autonomy to
those departments and agencies by the General Services
Administration.
o The upgrading or replacement of uneconomic and'. obsolete
ADP/OA systems.
o Improved salaries and hiring procedures so as to attract
ADP personnel to the Federal Government.
o The introduction of common application system software
in the areas of payroll, personnel, property management,
mortgage accounting, accounts payable, and other
similarly common functions which could reduce current
Government expenditures for those purposes ($3.3
billion) by approximately 20 percent.
In accouncing potential three-year cost savings of $21.8
billion, Mr. Grace noted that $10.6 billion of this total had
been identified by other PPSS task forces and that the ultimate
total could be significantly greater, since other reports not yet
released by the Survey would also have ADP/OA-related issues and
recommendations.
He further noted that of the three-year total, $10.8 billion
are fully substantiated by adequate documentation and another
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$11.0 billion are partially substantiated. Mr. Grace further
cautioned, however, that in all of the PPSS work, estimated
savings are more of a "planning" quality and not of a precise
"budget" quality."
The recommendations contained in the ADP/OA Report: will be
considered on June 13th by a Subcommittee of the Executive
Committee, chaired by Mr. Grace, for possible submission to the
President.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
(202) 466-5].70
IMPROVING MANAGEMENT PRACTICES IN THE ARMY COULD YIELD
THREE-YEAR COST SAVINGS OF $12.5 BILLION
WASHINGTON, June 30--If the Army could improve its
management practices in selected areas such as materiel and
weapons acquisition, recruitment and training, inventories, and
personnel assignment and rotation, three-year savings of'about
$12.5 billion should be achievable according to a report on the
Army released today by the President's Private Sector Survey on
Cost Control in the Federal Government (PPSSCC). The report also
recommended that the Army undertake a full-scale review of its
policy of separating from the service any soldier who is not
promoted within a prescribed period of time (the "up or out"
system).
These recommendations will be considered on July 13th by a
Subcommittee of the Survey's Executive Committee chaired by
J. Peter Grace, chairman of W. R. Grace & Co., for possible
submission to the President.
The Department of the Army task force was co-chaired by
Roger E. Birk, chairman, president, and chief executive officer
of Merrill Lynch and Company, Inc. of New York; John J. Horan,
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
-2-
chairman of Merck and Co. of Rahway, New Jersey; William A.
Marquard, chairman, president and chief executive officer of
American Standard of New York; and Lewis T. Preston, chairman of
J. P. Morgan & Company, Inc. of New York.
The task force questioned whether the need for a relatively
youthful, vigorous force to maintain wartime readiness could not
be just as adequately served by new policies which would also
permit selective retention of experienced personnel who, although
not candidates for promotion to higher rank, perform competently
in their jobs. The retention of experienced personnel could
enhance efficiency as well as reduce costs associated with
recruitment, training and retirement. The task force recognized,
however, that any modification of "up or out" would have many
ramifications on overall Army force management policies. For
that reason, the task force recommended that the Army conduct a
full-scale review to include an assessment of how some of our
European allies manage system that provide tracks for both
continuing career and "up or out."
According to the task force's analysis, three year savings
of $9.5 billion could be achieved if its recommendations for
improving materiel and weapons acquisition management were
implemented. In some cases, full implementation of the
recommendations would take several years. Citing the June 1982
Selected Acquisition Reports (SARs), the task force noted that 14
military procurement programs show cost growth from $30 billion
(more)
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-3-
as originally estimated to the 1982 updated estimates of $82
billion. The task force concluded that if several steps were
taken to improve management of major weapons acquisition, this
rate of cost growth could be slowed dramatically with annual
estimated savings totalling $1.6 billion achievable when the
recommendations are fully implemented. For example, the task
force recommended that the Army provide stronger technical and
engineering support to the program management team from the
outset of programs. The provision of such support would
stabilize the design of a weapons system earlier in its life
cycle. In turn, this stability would lead to fewer design
changes, and cost growth attributable to design changes would be
reduced. The task force conservatively estimated that enhanced
design stability alone could save $218 million annually.
The task force also identified stability as a major issue
for the Army's entire program of major weapon system acquisition
as well as for the design of individual systems. Repeated
schedule and quantity changes add billions to the price tags for
major weapon systems. The task force identified the annual
budget cycle as a major component of this problem and recommended
the Army change to a biennial budget cycle for major weapon
systems. This recommendation and other proposals to enhance
stability should produce $2 billion in annual savings when fully
implemented.
(more)
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-4-
In the area of inventory management, the task force
recommended that the Army review carefully its policies for
maintaining war reserve stocks. It recommended that careful
scrutiny be given to all new items proposed for inclusion in war
reserve stocks and that the Army make greater efforts to relate
its policies for management of war reserve stocks to its planning
with industry to increase defense production in time of war. The
implementation of these and other recommendations related to
managing war reserve stocks could yield $4.2 million of one-time,
three-year savings.
in indentifying yet another opportunity for management
improvement to achieve cost savings, the task force noted that
the Army is currently spending over $1 billion annually on moving
costs associated with personnel generally rotating every three
years to new assignments. In addition to costs, these permanent
change of station (PCS) moves have other effects on the Army,
among them the fact that the requirement for frequent relocation
is generally believed to be a negative characteristic of military
service and thus a deterrent to retention. With a view toward
both morale improvement and cost savings, the task force
recommended the Army reexamine aspects of its policies associated
with the moving of Army personnel and their families for European
tours of duty. The task force also recommended reducing the
number of PCS moves associated with certain continuing education
programs taken by
(more)
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majors and captains. When implemented, the changes recommended
by the task force would yield three-year savings of $64.5
million.
"Of the three-year total of $12.5 billion in savings and
revenue generation, $4.6 billion are fully substantitated by
adequate documentation, and other $7.9 billion are partially
substantiated," Mr. Grace said.
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THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT ON THE DEPARTMENT OF THE ARMY
Media Contacts:
Jeanne Golly
American Standard Inc.
(212) 840-5200
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
(202) 466-5170
The Department of the Army
Task Force Co-Chairs
William A. Marquard
Chairman, President & CEO
American Standard
John H. Horan
Chairman
Merck and Company
Roger Birk
Chairman, President .& CEO
Merill Lynch and Co., Inc.
Lewis T. Preston
Chairman
J.P. Morgan and Co., Inc.
Project Manager
Richard Francis
American Standard Inc.
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
THE REPORT RECOMMENDATIONS -- A PERSPECTIVE
As the product of an unprecedented and wide-ranging
survey performed in a political atmosphere by private sector
executives and specialists, the recommendations in this Task
Force report must be placed in perspective. Our volunteer
staff had the formidable task of bringing their expertise to
bear on complex Federal operations in the short span of a
few months while holding down other full or part-time
employment.
Despite these challenges -- most of which were antici-
pated at the outset -- valuable analysis and issue develop-
ment were achieved. The recommendations contained in this
report will result, if implemented, in real and significant
savings and other benefits to American taxpayers whose hard
work and personal sacrifices financially support these
Federal programs and operations.
We believe that the majority of our recommendations
are fully substantiated. However, it would be misleading
to allege that each and every recommendation is rooted in a
uniformly high level of research, analysis and substantia-
tion. Various time limitations, business resources, and
other constraints did not permit achievement of the desired
uniformity objective.
We have evaluated, therefore, the "supportability" of
the recommendations on their management merits and have
grouped them into the following three categories.
o Category I -- Fully substantiated and defensible.
Recommendations in this category are,
in the opinion of the Task Force,
convincing and deserving of prompt
implementation.
o Category II -- Substantially documented and support-
able. Recommendations in this cate-
gory may not be fully rationalized or
documented in the report, but all
indications point to the desirability
and defensibility of proceeding with
their implementation.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
o Category III -- Potentially justifiable and support-
able. Recommendations in this cate-
gory, while meritorious, are not
regarded as fully supported;?in the
report, due to time, personnel
resources, and other constraints, but
are deemed worthy of further analysis
to determine the full extent of their
merit.
These category descriptions do not take into account
political, social or economic conditions which may alter the
supportability of these recommendations for implementation.
Accordingly, it is possible, by grouping the recommendations
along the above categories, to assess more effectively the
cost savings that can be expected. This analysis permits
summary estimates of firm, probable and potential savings.
The Report Recommendations -- An Assessment
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in
the matrix on the following page.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
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Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
AIR FORCE TASK FORCE IDENTIFIES $27.6 BILLION IN COST SAVINGS
WASHINGTON, June 30--Three-year savings of $27.6
billion could be achieved without "adversely affecting the
readiness of the Air Force to carry on its mission" according
to the Air Force task force report released today by the
President's Private Sector Survey on Cost Control in the
Federal Government (PPSSCC).
The report also made recommendations for reforming the
military retirement system, which when fully implemented would
result in billions of dollars of savings to the Department of
Defense budget, of which a three-year total of about $15
billion would be attributable to reducing retirement costs
associated with Air Force retirees. It should be noted,
however, that the retirement recommendations like some of the
other more significant recommendations would take several. years
for full savings to be achieved. Also, 90 percent of the
savings can only be obtained if appropriate Congressional.
action is secured.
These recommendations will be considered on July 13th
by a Subcommittee of the Executive Committee chaired by
J. Peter Grace, chairman of W. R. Grace & Co., for possible
submission to the President.
(more)
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
-2-
The Department of the Air Force task force was
co-chaired by James H. Evans, chairman of Union Pacific
Corporation of New York; Robert W. Galvin, chairman and chief
executive officer of Motorola Corporation of Schaumburg,
Illinois; and Paul F. Oreffice, president and chief executive
officer of Dow Chemical Company of Midland, Michigan.
The report called attention to significant
opportunities for cost savings in the area of procurement. In
all, the task force identified possibilities for three-year
cost savings of nearly $5.4 billion associated with more use of
multi-year procurement and dual sourcing, to enhance competition
more reliant on contracting out to the private sector for
commercial and industrial activities, and better management of
the use of consultant services.
The task force recommended that the Air Force should
be an aggressive advocate for multi-year programs in order to
achieve the benefits of increased program stability and lower
program costs. In the area of dual sourcing the task force
conculuded that the Air Force should develop a formal
methodology for evaluating the benefits that competition
introduces through dual sourcing and should apply that
methodology to review of programs in their early phases when
the greatest flexibility exists to achieve the maximum, benefits
available from competition.
(more)
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
-3-
In addition to retirement, the task force also
identified several other man-power related areas for cost
savings. For example, civilian employment ceilings, rather
than compensation costs, placed on the Department of Defense by
the Office of Management and Budget (OMB) and Congress were
also cited by the task force as creating unnecessary costs.
Ceilings result in more overtime and workforce
imbalances and are cited as being counterproductive because
they generate costs and fail to result in improved management
accountability.
The ceilings require civilian personnel to be at or
below the set ceiling levels by the last day of the fiscal
year, thus the Defense Department may exceed the ceiling levels
during the course of the fiscal year but must achieve the
ceiling by September 30.
Thus, an employee may be furloughed for the last day
of a fiscal year and be rehired one day later. This
unnecessary administrative costs was estimated by the Air Force
to be at least $150 per employee. If the Air Force is
successful in reducing its current over-employment from 12,000
to 4,000 by the end of fiscal year 1982, as it proposes to do,
it will cost approximately $600,000 simply to terminate and
rehire these 4,000 employees.
The task force recommended that Congress and the OMB
eliminate civilian employment ceilings and stress reliance on
the planning, budgeting and accounting processes to identify
personnel requirements and achieve employment discipline.
(more)
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
-4-
The task force also found that substantial savings
could be realized from consolidating facilities at common
locations where the Air Force Reserve and the Air National
Guard now conduct separate operations.
A detailed review of Air National Guard and Reserve
facilities, aircraft basing, and overall operations should be
undertaken by the Defense Department, according to the report,
to identify opportunities for facilities consolidations and
better coordination.
Citing outdated legislation as inflationary and
counterproductive, the task force recommended that Congress
repeal the Davis-Bacon Act, the Service Contract Act and amend
the Walsh-Healy Act.
Repeal or amendment of these outdated provisions could
reduce construction and management costs, increase competition
for Air Force contracts, and improve productivity.
"Of the three-year total of $27.6 billion in savings,
$22.7 billion are fully substantiated by adequate
documentation, and another $4.9 billion are partially
substantiated," Mr. Grace said.
Mr. Grace cautioned that in all of the PPSSCC work,
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA-SUMMARY
TASK FORCE REPORT ON THE DEPARTMENT OF THE AIR FORCE
Media Contacts:
Charles Eaton
Union Pacific Corp.
[phone]
Murray Sanders/Chris Tofalli
The President's Private Sector
Survey on Cost Control
[phone]
The Department of the Air Force
Task Force-Co-Chairs
Robert Galvin
Chairman & CEO
Motorola Corp.
Paul Oreffice
President & CEO
Dow Chemical Co.
James Evans
Chairman
Union Pacific Corp.
Project--Manager
Charles Eaton
Union Pacific Corp.
THE REPORT RECOMMENDATIONS -- A PERSPECTIVE
As the product of an unprecendented and wide-ranging
survey performed by private sector executives and
specialists, the recommendations in this Task Force report
must be placed in perspective. Our volunteer staff had
the formidable task of bringing their expertise to bear on
complex Federal operations in the short span of a few
months while holding down other full or part-time
employment.
Despite these challenges -- most of which were antici-
pated at the outset -- valuable analysis and issue develop-
ment were achieved. The recommendations contained in this
report will result, if implemented, in real and significant
savings and other benefits. to American taxpayers whose hard
work and personal sacrifices financially support these
Federal programs and operations.
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
(fl
"rr r%17n
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
We believe that the majority of our recommendations
are fully substantiated. However, it would be misleading
to allege that each and every recommendation is rooted in a
uniformly high level of research, analysis and substantia-
tion. Various time limitations, business resources, and
other constraints did not permit achievement of the desired
uniformity objective.
We have evaluated, therefore, the "supportability" of
the recommendations on their management merits and have
grouped them into the following three categories.
o Category I -- Fully substantiated and defensible.
Recommendations in this category are,
in the opinion of the Task Force,
convincing and deserving of prompt
implementation.
o Category II -- Substantially documented and support
able. Recommendations in this cate-
gory may not be fully rationalized or
documented in the report, but all
indications point to the desirability
and defensibility of proceeding with
their implementation.
o Category III -- Potentially justifiable and support-
able. Recommendations in this cate-
gory, while meritorious, are not
regarded as fully-supported in the
report, due to time, personnel
resources, and other constraints, but
are deemed worthy of further analysis
to determine the full extent of their
merit.
These category descriptions do not take into account
political, social or economic conditions which may alter the
supportability of-these recommendations for implementation.
Accordingly, it is possible, by grouping the recommendations
along the above categories, to assess more effectively the
cost savings that can be expected. This analysis permits
summary estimates of firm, probable and potential savings.
The Report Recommendations -- An Assessment
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in
the matrix on the following page.
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
THREE-YEAR SAVINGS BY CATEGORY
S millions)
FINANCIAL MANAGEMENT
USAF 1 Management Reporting
and Control
Compensation --
Military Pay
Civilian Year
End Ceilings
Severance Pay
Coordination of Guard/
Reserves
Guard/Reserves Dual Pay
Guard/Reserves
Bonus Program
Military Airlift
Command -- No Shows
USAF 2 Travel Reimbursements $ 46.0
USAF 3 Planning, Programming
and Budgeting System 7.9
MANPOWER
USAF 4
USAF 7
USAF 8
USAF 9
USAF 10
LOGISTICS
USAF 13
USAF 14
USAF 15
USAF 16
USAF 17
USAF 18
Category
I II
$1,159.0
-- Savings Not Quantified
96.0
17.5
165.5
66.0
ADP Modernization
Service Contract Act 2,383.0
Davis-Bacon Act
Spare Parts Breakout
Walsh-Healey Act
Section 8(a) Small
Business Act
579.8
1,337.0
Multiyear Procurement 2,400.0
Dual-Sourcing
Contracting Out 331.0
Consultants 227.7
Total Savings to U.S. Air Force $7,614.1 $4,905.6
PROCUREMENT
USAF 19
USAF 20
USAF 21
USAF 22
SAVINGS TO OTHER AGENCY/
DEPARTMENT BUDGETS
USAF 5 Retirement (to.DOD) 15,050.0
USAF 12 Military Airlift
Command -- Contract
(to various agencies)
Total Savings to Other
Agency/Departments $15,050.0 $ 19.9
TOTAL TASK FORCE
RECOMMENDED SAVINGS $22,664.1 $ 4,925.5
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Contacts:
Clifton Cox
Cox Lloyd Associates
[phone]
Jim DiClerico/Murray Sanders
The President's Private Sector
Survey on Cost Control
[phone]
PRIVATE SECTOR SURVEY TO RECOMMEND $11 BILLION IN AG SAVINGS
WASHINGTON, April 5 -- A possible $11.2 billion three
year savings plan for the Department of Agriculture was made
public today in a task force report of the President's Private
Sector Survey on Cost Control (PPSSCC). These recommendations
will be considered on April 15th by a Subcommittee of the
Executive Committee chaired by J. Peter Grace, chairman of W. R.
Grace & Co., for possible submission to the President.
The PPSSCC Agriculture Department task force, was
headed by William Graham, chairman of Baxter Travenol Labs, Inc.,
and William Wood Prince, president of F. H. Prince & Company.
"Of the three-year total of $11.2 billion of
recommended savings, $8.6 billion are fully supported by adequate
documentation and another $2.6 billion are partially supported."
Mr. Grace also said $157 million in savings over a three-year
period require further study.
(more)
1850 K Street, N.W. ? Suite 1150 0 Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
"Besides the recommended ways to save money," the
Private Sector Survey chairman said, "there are recommendations
which we believe could result in revenue enhancement in the
amount of $1.7 billion."
Mr. Grace cautioned that in all of the PPSSCC work
estimated savings are more of a "planning" quality and not of a
precise "budget" quality.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
THE PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
MEDIA SUMMARY
TASK FORCE REPORT FOR THE DEPARTMENT OF AGRICULTURE
Media Contacts:
Clifton Cox
Cox Lloyd Associates
(602) 955-1202
Jim DiClerico/Murray Sanders
The President's Private Sector
Survey on Cost Control
[phone]
Dept. of Agriculture Task
Force Co-Chairs
William Graham
Chairman
Baxter Travenol Labs, Inc.
William Wood Prince
President
F. H. Prince & Company
Project Manager
Clifton Cox
Cox Lloyd Associates
1850 K Street, N.W. ? Suite 1150 ? Washington, D.C. 20006
[phone]
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
THE REPORT RECOMMENDATIONS - A PERSPECTIVE
- It is vitally important that the recommendations in this
Task Force Report be placed in perspective. They are the
product of an unprecedented and wide-ranging survey that was
performed in a politically-charged atmosphere by private
sector executives and specialists whose services were volun-
teered -- often on a part-time basis. This staff had the
formidable task of bringing their expertise to bear on
largely unfamiliar and complex Federal operations in the
short span of a few months. Frequently, these efforts were
expended while holding down other full or part-time
employment.
Despite these difficult and perplexing challenges -- all
of which were anticipated at the onset -- a great deal of
valuable work was performed. The recommendations contained
in this Report, if implemented, will result in real, and sig-
nificant savings and other benefits to American taxpayers
whose hard work and personal sacrifices foot the bill for
these Federal programs and operations.
We have sought to be realistic about the recommendations
reported. The great majority of them, we believe, are fully
substantiated. However, it would be misleading for us to
leave the impression that each and every recommendation is
rooted in a uniformly high level of research, analysis, and
substantiation. The press of time, other business commit-
ments, lack of adequate resources, and other constraints did
not always permit the luxury of achieving this desired
uniformity.
As a result, and to promote a realistic expectation of
recommendations reported, we have evaluated the "support-
ability" of the recommendations on their management merits
and have grouped them into three categories.
o Category I -- Full substantiated and defensible.
Recommendations in this category are,
in the opinion of the Task Force.
convincing and deserving of prompt
implementation.
o Category II -- Substantially documented and support-
able. Recommendations in t is cat-
egory may not be fully rationalized
or documented in the Report, but all
indications point to the desirability
and defensibility of proceeding with
their implementation.
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 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
o Category III -- Potentially justifiable and support-
able. Recommendations in this cat-
egory, while meritorious, are not
regarded as fully supported-in the
Report, due to time, personnel
resources, and other constraints, but
are deemed worthy of further analysis
to determine the full extent of their
merit for implementation.
These category descriptors do not take into account
political, social or economic conditions which may alter the
Ac-
supportability for implementing these recommendations.
cordingly, by grouping the recommendations along the above
categories, it is possible to assess more effectively the
cost savings that can be expected. Thinlysisdpermits
summary estimates of: (1) firm, (2) probable,
potential savings opportunities, while recognizing that the
proposed savings dollars themselves are of a "planning esti-
mate" quality (i.e., generally statistically derived) and
not yet of a "budget quality."
The Report Recommendations - An Assessment
Based on the above perspective and categorization, an
assessment of the reported recommendations is contained in
the following matrix:
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 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
Category/3-Year Savings (S)/
Revenue Opportunities (R)
(S millions)
Farmers Home Administration
AG 1: Match new loans with a $768(S) $-- $--
graduation of existing loans
AG 2: Improve management 63(S)
information
AG 3: Shift from direct lending 451(S)
to 75 percent guarantee of
private loans
AG 4: Transfer housing loans
to HUD
AG 5: Transfer FmHA commumnity 7(S)
development loans to SBA and
SBA farm loans to FmHA
AG 6: Invest supervised bank
accounts in interest-
bearing accounts
AG 7: Decrease float in handling 57(S)
of receipts
AG 8: Collect $15 fee for
credit reports
23 (R)
Food and Nutrition Service
AG 9: Update the food stamp base 3,442(S)
household in the Thrifty Food
Plan standard
AG 10: Update economies-of-scale
factors used in food stamp
determination
AG 11: Eliminate $10 minimum
monthly food stamp benefit;
provide amount calculated in
food stamp formula
119 (S)
834 (S)
139 (S)
105 (S)
Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
Category/3-Year Savings (S)/
Revenue Opportunities (R)
(S millions)
I II III
AG 12: Reduce food stamp $30(S)
printing costs
AG 13: Reduce food stamp/school 1,724(S)
lunch overlap by counting free
school lunch benefits as income
in food stamp determination for
households in both programs
AG 14: Reduce food stamp/child
nutrition overlap by counting
Federally financed child nutri-
tion benefits as income in food
stamp determination for house-
holds in both programs
536(S)
AG 15: Reduce costs of commodity 36(S)
storage and distribution
Agricultural Marketing Service
AG 16: Reduce poultry inspection 308(S)
requirements consistent with
adequacy of quality control data
AG 17: Use discretion in intensity 28(S)
of meat inspection
AG 18: Eliminate triple inspec- 5(S)
tion of dairy plants; have one
inspector
AG 19: Revise label approval 4(S)
process
AG 20: Assess user fees for 5(R)
technical assistance services
$--
Foreign and Domestic Commodity
Programs
AG 21: Revise price support 13,000*
IC\
program
*Not included in totals. See Executive Summary.
_k Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
Category/3-Year Savings (S)/
Revenue Opportunities (R)
(S millions)
AG 22: Require recipient depart- $1,205 $-- $"
ments to budget and pay for USDA
commodities they use
AG 23: Provide better method of 262
export financing vs. interest
buydown program
AG 24: Phase-out cooperator funding 37(S)
for established cooperators
AG 25: Eliminate cargo preference 357(S)
requirement on certain commodity
shipments
AG 26: Administer ocean freight 40(S)
differentials more efficiently
AG 27: Transfer USDA freight for- 8(S)
warding activity to private sector
or sponsoring agency
AG-28: Disband Ocean Transporta- 2(S)
tion Division of USDA
AG-29: Eliminate duplication among 22(S)
Economic Research Service, Foreign
Agricultural Service and World
Agricultural Outlook Board
AG-30: Reorganize Foreign Agricul-
tural Service European represen-
tation
4(S)
AG-31: Reduce use of U.S. national 1(S)
secretaries in overseas posts
AG-32: Reorganize Agricultural 0
Attache Service, to improve
efficiency
AG-33: Improve analysis of export 0
credit requests to reduce future
risks
Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
Category/3-Year Savings(S)/
Revenue Opportunities(R)
($ millions)
I II III
AG 34: Make more effective use of $0
export promotion funds as funding
for certain interest-free loans
Local USDA Programs
AG 35: Consolidate and colocate 194(S)
various USDA county offices
AG 36: Accelerate county office 3(S)
automation plans
AG 37: Improve soil survey process 50(S)
AG 38: Establish user fee of $25 21(R)
per copy for soil survey reports
AG 39: Consolidate Soil Conserva- 14(S)
tion Service administrative staffs
AG 40: Streamline county election
process
Forest Service
AG 41: Revise schedule of timber
purchaser payments
26 (S)
460 (S)
AG 42: Use transaction method for 99(R)
timber appraisals
AG 43: Adopt lump-sum sales pay- 54(R)
ment for timber purchases
AG 44: Increase various recrea- 125(R)
tion fees
AG 45: Charge for firewood now 66(R)
given away
AG 46: Increase fees for grazing 58(R)
cattle on public lands
Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
 Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
Category/3-Year Savings (S)/
Revenue Opportunities (R)
($ m i l l i o n s)____,_
AG 47: Reduce road construction $172(S)
and maintenance costs
AG 48: Improve Automatic Data
Processing planning
43 (S)
AG 49: Improve research activities 24(S)
AG 50: Reduce staffing levels by 339(S)
improved efficiency
Science and Education Administration
AG 51: Establish National Research 251(S)
Board and realign regions
AG 52: Reduce administrative 83(S)
support of Agricultural Research
Service by reorganization and
consolidation
AG 53: Transfer selected human nu- 99(S)
trition research programs to HHS
AG 54: Eliminate 8 percent contri- 36(S)
bution to funding of 20 low-
priority research programs that
can be funded by other than
Federal sources
AG 55: Redirect Cooperative Exten-
sion Service staff toward initia-
ting new programs
Rural Electrification Administration
Ag 56: Begin extracting the Govern-
ment from REA Generation and
Transmission loans
13(S)
10(S)
Approved For Release 2008/04/02 : CIA-RDP85B01152R001201530001-7
 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
Category/3-Year Savings (S)/
Revenue Opportunities (R)
($ millions)
AG 57: Expand use of private
sector financing by REA
distribution borrowers
AG 58: Reduce nonessential
regulation and services
for REA borrowers
I II III
$132(S) $-- $--
3(S)
TOTAL COST SAVINGS (S) BY CATEGORY $9,764 $2,506 $ 157
TOTAL REVENUE GENERATION (R) 326 244 0
BY CATEGORY
Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
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Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
 Approved For Release 2008/04/02 : CIA-RDP85BO1152R001201530001-7
HEALTH AHD HUMAN SEINI?M IER TASK POKE
(1) (2)
Task Three and
Recommendation
Humber
through 2-84 Management to eliminate
organization layering and
duplication,__
(2) HHS 3-1 Streamline correspondence /
through 3-5 control and clearance pro-
cedures to assure more timely
response at less cost.
(3) HHS 6-1 Reorganize the Office of
through 6-17 Human Development Services
(HDS) to improve effective-
ness and reduce costs.
(4) HHS 7-1 Modify management practices
through 7-4 and the organizational
structure of HDS to improve
:? social research.
(5) HHS 8-1 Adopt the delay-of-drawdown
and 8-2 program in the remaining
states and/or adopt the
checks paid letter of credit
approach for advancing
Medicaid funds.
v Total Fully Supportable Savings
PARTIALLY SUPPORTABLE SAVINGS
(6) HHS 1-1 Reduce the ACTION staff by
40 percent.
(7) HHS 4-1 Eliminate the policy research
and 4-2 of HHS Department Management.
(8) HHS 5-1 Eliminate evaluation of pro-
and 5-2 jects within the office of
the Secretary.
Savings (S)/Revenue Enhancements (R)
(S millions)
(Year I) (Year 2) (Year 3) Total
L
$ 1.6* $ 2.6*
7 '3
$ 13,.Jt'' $ 20
$ 20.0 , $ 22.0,
$ 48.0 10 52.8
$212.8 (S)
$ 2.9*
$ 7.1* (S)
$ 22.3 /
$ 56.3 (9)
$ 24.2-
$ 66.2 (9)
$ 58.1
$158.9 (9)
$ 10.5 L $ 11.6
Total Partially Supportable Savings S 29.8 $ 37.0
$ 11.2-
$ 26.7 (S)
$ 12.7
$ 34.8 (S)
$ 40.7
$107.5
page 3
(4) '
Implementation
Authority
A - Agency
P - President
STAT
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