Agency Survey Shows Government Efficiency Lags

Acquisition and procurement lowest in eight federal cost efficiency comparisons

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Oct 31, 2012, 09:00 ET

WASHINGTON, Oct. 31, 2012 /PRNewswire/ -- Competing priorities are slowing down federal government efficiency, according to a new study from the Government Business Council (GBC), sponsored by Deloitte. Just 29 percent of the federal managers surveyed give high marks to the efficiency of their agency and 16 percent say the same about the federal government as a whole.

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The study identified eight federal cost areas— payments, oversight and compliance, property management, redundancy, contract resource management, technology, workforce, and acquisitions and procurement—and asked federal managers surveyed to rank their efficiency on a 1 to 5 scale (5 being the highest). Acquisitions and procurement is viewed as the least efficient with a mean score of 2.66 out of 5, while payments ranks highest with a mean efficiency score of 3.28 out of 5.

"We talk a lot about efficiency in the federal government, but the term is fairly abstract," says Dana Grinshpan, research manager at the Government Business Council. "In this study, we isolated individual cost areas of government in order to pinpoint what federal managers perceive as the roots of inefficiency."

Additional specific report findings include:

Various factors contribute to inefficiency, but competing priorities is viewed as the most significant impediment. Eighty-five percent of managers agree that competing priorities is a challenge to reducing inefficiency.
Of the respondents who find managing cost reduction initiatives to be difficult, tracking the effectiveness of these efforts is the top challenge (80 percent).

Despite these obstacles, agencies across government are completing successful cost reduction initiatives. According to the GBC focus group, studying these successful cost reduction efforts reveals an emphasis on strong leadership, cross-disciplinary advisory bodies or committees, and the use of data to inform agency decision-making. Techniques which focus group members say could be used to drive greater federal agency efficiency.

"The environment created by reduced funding and growing uncertainty over the coming fiscal years provides an opportunity for federal managers to try new things, and agency cost constraints will further drive the demand for efficiencies," says Janet Hale, director, Deloitte Services LP and former undersecretary for management at the U.S. Department of Homeland Security. "Now is the time for federal managers to take advantage of this environment to make a plan for prioritizing investments, launching new initiatives, and considering how to do things differently. By taking preemptive steps now, federal managers can help their organizations emerge as leaner more agile and responsive organizations."

The report, "Cutting Costs: Inside the Effort to Improve the Efficiency of Federal Operations," assesses the perceptions, attitudes, and experience of federal employees regarding government efficiency and cost reduction. The study is based on survey data collected from about 600 senior-level federal employees from the GS/GM level 11 through 15, the Senior Executive Service, and high military ranks, supported by focus group input and extensive secondary research.

To download the full report, please visit: www.deloitte.com/us/pr/costcuttingreport.

To learn more about leading practices in efficiency and cost reduction, please visit www.deloitte.com/us/federalcostrecovery.

About Deloitte's Federal Government Practice

Deloitte provides audit, consulting, financial advisory, risk management and tax services to selected clients. More than 6,600 professionals are dedicated to serving U.S. federal clients with wide-ranging missions. Deloitte is helping federal organizations explore how to be more efficient or do things differently, with a deep understanding of the government's requirements, processes, and systems, and insights into workforce and technology issues. By drawing on industry-leading restructuring practices across government and business, Deloitte applies a mix of private-sector perspective and public-sector experience to help federal agencies rethink, reduce, and restructure—from day-to-day operations and large-scale transformations. Deloitte helps agencies in their efforts to address today's biggest challenges and build a stronger foundation for tomorrow. To learn more, visit deloitte.com/federal.

About Government Business Council Industry Insights
As Government Executive Media Group's research intelligence division, the Government Business Council (GBC) is dedicated to advancing the business of government through analysis, insight and analytical independence. As an extension of Government Executive's 40 years of exemplary editorial standards and a commitment to the highest ethical values, the GBC joins with industry leaders to study influential decision-makers from across the federal government and produce intelligence-based research and analysis.

*As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

SOURCE Deloitte