Innovative Performance Incentives (Share in Savings) by richman6


									Innovative Performance Incentives
         (Share in Savings)

                    Kenneth J. Buck
                    Federal Technology Service
                    General Services Administration
        What is Share in Savings
   Special Contracting and Funding Strategy:
    –   Little or No “Upfront” Funding
    –   Payment from the Savings or Revenue;
    –   INTERdependence with Industry;
    –   Strongly Resembles Incentive Contracting.

   90-99% of Risk on Contractor;

   Payment Made Only AFTER Substantial Results
    are Achieved;

   Pay only for Results--Not Just Effort.
                     Why Now?
   Statutory Authority;
          Clinger Cohen Act
          Two Pilots
          Requires OMB Approval

   Tight Budget Ceilings

   Innovative Practices are Favored

   GSA Asked to Play Leadership Role

   FTS Implementing Government Wide
                 Present Status
   Seeds are Germinating;
    – Education
    – GSA
    – Commerce, OPM, DoD
   Thompson/Leiberman/O’Neill/Chenok support;
   Council for Excellence Study/Report;
    – Released in December 2000
    – Crosswalk Past Successes to Federal Opportunities
    Criteria for SIS Candidates

   Clear Baseline Data
   Large Potential Benefit Pool
   Enlightened Leadership
   Entrepreneurial Culture
   Very High ROI
   No A-11 Rejects
       A Winning Strategy?

 Government funds innovation,
  collects more revenue, satisfies
 Contractors enjoy greater profit
 New public/private partnerships form
 Taxpayers benefit

Why Hasn’t There Been
More SIS Contracting?
       Council For Excellence in
          Government Study
   Where has SIS been implemented?

   What are keys to success?

   Where might the Federal govt. apply SIS?
          Where Implemented?

   Federal, State and Local Government

   Recovery Auditing

   Revenue Collection

   Energy Savings

   Revamping Agency Systems

   Innovation in Lease and Use of Public Buildings
              SIS Success Stories

   Massachusetts Contingency Contracting
    – Re-engineered Systems for Collecting Non-tax Revenue

   Virginia Department of Taxation
    – Systems Overhaul (Hardware, Software, Electronic Network, BPR)

   U.S. Department of Education
    – In 2000, New Project in “Value Engineering”
     SIS Success Stories (cont’d)

   Audit Recovery: PRGI
    – Worked with DOD to Recover Overpayments, Duplicates,
      Missed Discounts

   Galveston Custom House Outlease
    – Innovative Lease Arrangement to Halt PBS Losses
                 Keys to Success

 Defined Baseline

 Large Incentives

 Statutory Authority

 Measurable Results
        Keys to Success (cont’d)
 Leadership Support

 A Champion

 A Culture Able to Change

 Willingness to Take and Manage Risks

 Aggressive Decision Making

 Teamwork, Cooperation, Trust

 Ability to Maintain Confidence
Where Else Might SIS Be Applied?

 1. Improving Efficiency of Agency Systems
   – Customer Relations Management
   – Seat Management
   – Data Center Consolidation

 2. Recovery Auditing
   – Agriculture (Food Stamps, WIC, School Bkfst/Lunch)
   – HHS (Medicare and Medicaid)

 3. Revenue Collection
   (products and Services)
   – Commerce (Census, NOAA, NTIS, PTO)
   – Interior (Geological Service)
   – Justice (Bureau of Prisons)
   – Government Printing Office
   – United States Mint
Where Else Might SIS Be Applied?
   – Agriculture
   – HUD
   – Veterans Affairs
   – SBA
   – Interior (Minerals and Land Management)
   – Justice (Tax Division)
   – SSA
4. Innovation in Leases/Use of Public Buildings
   – GSA
   – DOD
5. Energy Savings
   – Broad Opportunities in Older Buildings
   – Coordinated w/GSA
                 “Can We Do It?”

   “Business” You’re In (Government)

   Clients You Work with (Contractor)

   Specifics of the Opportunity

   Culture/Climate of Target Organizations

   OMB/OFPP need to be active leaders;
   Agency CFO, CIO, Proc. Exec. Must Partner;
   Non Traditional Relationship with Industry;
   They Must Have Control Given High Risks
   Profit Margins will be Extraordinary;
   Must Stay the Course Even When Political
    Environment Changes;
   MUST Work Closely with Appropriations;
            Help is Available

 FTS Web Site –
   – Information and Template

 CEG Web Site –
   SIS Success Stories and Study Results

 FTS Consulting/Coaching
   Call Ken Buck
   (703) 306-6014

 Benchmarking

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