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You did, as I understand it, express to the management off your concerns about the scope of the survey. With regard to the personnel task force, as far as I am concerned, I have operated in terms of guidance received from the management office. They have been well aware from the beginning of areas that we are looking into, and at no time has anybody told me that I am in areas where I am not supposed to be. Sir, seriously, you are asking the wrong person, in terms of whether I am in the right area or not.
The CHAIRMAN. What I am trying to find out, when I asked you about the criteria, is this. The table of organization indicates that direct authority goes from the President to J. P. Grace, chairman, Executive Committee, and the management office, and then directly from them goes to the task forces, to the cochairpersons, and to the project managers and they show the task force following behind that.
I ask you, what criteria came down that line to set up your work plan, and you indicated you were pretty much on your own. Now, where and at what level did people hold a meeting and decide on the several items. You talk about pensions, social security, and other things with respect to Federal employee personnel matters. At what point in this process did somebody determine that those components would be in your study?
Mr. PRANGER. The determination that the components would be in the study were initially made by the task force that I chair. I can honestly state to you that I have no idea what process the review of the work plans took in terms of the management office. I, once again, have operated on the basis that unless I am told I am in areas where I do not belong, I am going in that way, sir. It is that simple. I honestly cannot tell you of any meeting or any groups of meetings, or who discussed it, or anything else.
My relations with the management office come through my desk officer, and then in terms of weekly meetings or biweekly meetings of the task force managers by the chief operating officer, J. P. Bolduc.
The CHAIRMAN. Then your task force has not met and discussed the content of the work plan?
Mr. PRANGER. No, sir, they have not. Wait a minute. By task force, what do you mean? My members obviously were involved in writing it. I am talking about the working members of the task force. They knew what was in it. The people on my task force now. I am unaware of what went on at the PPSSC headquarters, in terms of any review of those. Quite honestly, we have just been going like mad, trying to do indepth studies, sir. I have not concerned myself, until somebody tells me I am on the wrong track or that sort of thing. They have copies of what I am working on; they know what I am working on.
The CHAIRMAN. I certainly am not trying to suggest that you are on the wrong track. I am trying to find out what track you are on. I find that the work plan that I have looked at for your task force indicates that
you are spending all of your time on the substance of programs, and there is no delineation of any study of the personnel requirements of OPM; whether they are fully staffed, overstaffed, or understaffed; or whether their people are properly classified; or whether their people are properly trained.
You mentioned that you studied the Mercer report. One of the things that we asked Mercer to look at was whether or not we had sufficient numbers of professional people over there, matching up against the professionals in the insurance industry, for example, in the negotiating process. We concentrated on that. We saw the comments that Mercer had, and they went back: they were not talking about this administration, this OPM, but the history of the handling of the health plan. We were interested in whether indeed we were giving them the kind of tools they needed to do a professional job of determining what health benefits ought to be and how they ought to be administered. But there is no attention given to that in your work plan as a priority.
Mr. PRANGER. Mr. Chairman, I do not know what you have. I am going to repeat once again, with regard to the work plan: If it is to be released, it must be released from the management office of the PPSSC. I really am not at liberty to discuss what is in it. But I can assure you that we are looking at internal operations and various aspects of internal operations of the Office of Personnel Management, as well as other personnel practices.
The CHAIRMAN. If I show you this. The staff has given you a copy of what I am referring to as the work plan for the personnel task force. Are we talking about the same thing?
Mr. PRANGER. It looks like bits and pieces of it, sir. It does not look like the entire work plan. Once again, I can assure you, sir, we are looking into the efficiency of operations within the Office of Personnel Management, as well as the basic approaches that OPM uses in terms of controlling personnel operations throughout the Federal Govennment and things like that.
The CHAIRMAN. Let us look at this work plan. I am looking at the first full page. You have three columns. The left-hand column is entitled "Opportunity and Brief Background.” The second column is “Estimated Savings on Improvements.” The_third column is "Estimated Man-Weeks Required of Task Force to Reach Final Report and Recommendations." Are you working from this sheet?
Mr. PRANGER. Sir, I have to repeat that I am not at liberty to discuss the contents of the work plan until such time as it has been officially released to you. I say this very respectfully, sir, but the instructions that I am under are that I am not to discuss the details of the work plan. I am quite willing to talk about how we are doing it, the approach we are using, who we are talking to and things like that; but seriously, I am not at liberty to discuss the contents of the work plan.
The CHAIRMAN. You are not at liberty to discuss the content of
Mr. PRANGER. Mr. Felix Larkin and Mr. J. P. Bolduc, from the management office of the PPSSC.
The CHAIRMAN. And they told you not to discuss with our committee
Mr. PRANGER. The details of the work plan, sir.
The CHAIRMAN. Even to the extent of not being willing to acknowledge that this is your work plan?
Mr. PRANGER. I said, sir, it looks like parts of it. It does not appear to be the entire plan. I do not have the entire work plan
The CHAIRMAN. But you could not give us the entire work plan?
Mr. PRANGER. No, sir. I am not allowed to release that. My understanding is, you have requested it and that they are discussing it with counsel, in terms of whether or not they may release it, sir.
The CHAIRMAN. So I cannot ask any questions with respect to what is on your work plan?
Mr. PRANGER. Sir, you can ask any questions you want to, but I am simply telling you that I am told I am not at liberty to discuss or not discuss it. But I can assure you, we are looking at efficiency of operation of the Office of Personnel Management.
The CHAIRMAN. Let us look at the column of "Estimated Savings Over Improvements.” It says,
CBO report suggests changes aggregating $23 billion over the period 1983 to 1987. The actuary's report 1980 indicates current assumptions are unrealistic. More reasonable assumptions would increase costs as a percentage of payroll from 26 percent to 43 percent.
Can you tell me what kind of costs they are talking about and what the $23 billion represents?
Mr. PRANGER. Sir, as we go through this. We are in the stage of reviewing all possible sources of information on all major aspects of personnel administration, sir. I said that in my statement. From that, obviously you can assume that we are looking at the areas you are talking about. We are in the process of trying to refine those figures, and in the process we have talked to Federal officials, which include people in the Office of Personnel Management who are the management officials responsible for these programs we are looking at.
The CHAIRMAN. When you get into Federal employees health benefits, you do start to sound like the charter of the survey. You say, "The concerns are the level of costs," "Health care cost escalation in the United States,” and “administrative complexity.” Now, of those three, the "administrative complexity” is fairly easy for me to identify with what the task force is supposed to be doing. Then, when I look at the level of costs, and then go across to the next column, I am trying to relate them one to the other. It says, "Private sector experience indicates savings from 15 to 30 percent not uncommon just from improved claim control procedures.” Now, that seems consistent with what the survey set out to do.
“ Application of Business Round Table health initiative approaches to FEHBP would constitute an improvement." That is an assumption that you must base on some examination of both present practices, your own experiences therewith and then "the application of the Business Round Table health initiative approaches" suggests that you have familiarity with that; and then finally, "savings from simple administration cannot be estimated at this time.” You allocate 8 man-weeks to the concerns.
Then you go on, "pay for time not worked.” “Concerns are cost of vacation and cost of sick leave.” “Cost of vacation for Federal employees in 1980 was 7.4 percent of payroll, versus 4.9 percent in the private sector. Cost of sick leave for Federal employees in 1980 were 3 percent of payroll versus 1.3 in the private sector. Unused
sick leave counts as service under CSRS.” In looking at those, are you trying to determine why, administratively, the cost of vacations for Federal employees in 1980 were 7.4 percent of payroll, versus 4.9 in the private sector, or are you looking at it in terms of whether or not the private sector sample that you used, when compared to the Federal Government, is not as generous in the basic benefits for vacation and basic fringe benefits for vacations?
Mr. PRANGER. Sir, you are leading me back into the specifics in the work plan. I will state that we are using every source, and we are making all kinds of comparisons in terms of all personnel practices in the Federal Government. As I indicated in my statement, this does include baseline analysis of private sector personnel management systems and practices, sir.
I would, once again, want to put in the record the fact that we have reached no conclusions yet, sir. We are still deeply involved in the indepth fact gathering, long before we will be making any final recommendations.
Sir, would you like for the record a copy of the personnel task force members?
The CHAIRMAN. Yes. I am still assuming, in all the optimism I can bring to bear, that when I saw the director sitting in front of me, reading from the list, and he said he would leave the list with us, I specifically said, “If you have no extra copy, we will copy it for you." I was surprised to find the next day that he did not leave
Mr. PRANGER. I have no idea what went on there, sir.
The CHAIRMAN. I am curious as to why there would be any question as to the makeup of the task force.
Mr. PRANGER. I have no problem disclosing the makeup of this task force, sir.
The CHAIRMAN. On September 7, Mr. Bolduc sent a memorandum to desk officers and project managers. While you are not listed as one of the recipients of this memorandum, did that get to you as a task force member? Mr. PRANGER. Yes, it did, sir.
The CHAIRMAN. This is the memorandum that said, “We would like to begin compiling a list or an accounting of three to five of the most horrifying and ridiculous events, anomalies, conditions, and practices found by your task force.”
Were you able to comply with that?
The CHAIRMAN. Would you care to comment, from your position with the task force and your very obvious commitment to the objectives of the task force, on the second sentence of the first paragraph that says, “These need not be large dollar items, but rather should focus on the ridiculous and the absurd.”
Mr. PRANGER. I did not write that memo. I had nothing to do with it. The only comment I will make is, We are not looking for horror stories in the personnel task force, sir.
The CHAIRMAN. So you are ignoring the memo?
Obviously, if there is any example to support a recommendation we make, we will include those in the factual basis for those recommendations. But I repeat once again, we are not looking for horror stories, sir.
The CHAIRMAN. Just between the two of us, what does this memo suggest to you in terms of the direction you will be going in on the activities of your task force?
Mr. PRANGER. I did not even look at it in this way. It did not bother me in the least, one way or the other, sir.
The CHAIRMAN. But did not this memo come from the same person who has given you all your instructions? Mr. PRANGER. Yes, it did, sir.
The CHAIRMAN. Has he given you any other instructions that you have chosen to disregard? Mr. PRANGER. No. The CHAIRMAN. This is the first one? Mr. PRANGER. Yes, sir. The CHAIRMAN. The only one? Mr. PRANGER. Yes, sir.
The CHAIRMAN. According to the copy of the work plan that we are looking at here, which you say has bits and pieces but may not be complete, it would appear that you should be approaching the time for a second round of draft recommendations in the civil service retirement area. Have there been any draft recommendations formulated?
Mr. PRANGER. No, sir. My people are probably drafting right now. The process we will use, before any recommendation we consider is even forwarded up to the management office, we intend to hold in-depth argumentive-type sessions with the entire task force there. If you want a timetable, my guess is it will probably be in the middle of October before we will be submitting anything up there. As we go through this, I will not say that nobody has, nor begun to, jot down ideas or recommendations, Mr. Chairman. We are still several weeks away from any definitive recommendations. We intend to go through a very intensive arguing-back-and-forth session before anything comes out of this.
The CHAIRMAN. There are several policy issues raised in the work plan, and I would like to ask you if the draft recommendations now address any of those policy issues. The first one is social security coverage for Federal employees. Mr. PRANGER. I have no draft recommendation on that yet, sir.
The CHAIRMAN. Is the draft recommendation now in preparation addressing itself to that?
Mr. PRANGER. They are probably writing, the people on the task force, and shooting for a deadline of attempting to get those completed in initial draft form on the first week in October. Once again, sir, we will go through an argument internally, in terms of whether or not we will submit them.
The CHAIRMAN. You do not see any significance in a draft coming out in the first week in October, reaching the conclusion that Federal employees should be covered by social security?
Mr. PRANGER. Sir, I hope there is significance in every recommendation we come up with, in terms of the importance of the recommendation. I would hate to think that the people—and I have a