Various Congressional Reports such as the Mercer Report on Federal Employees Health Benefits Program; and

Statistical reports on the composition of the Federal work force.

Using this approach we are studying all major aspects of the Federal personnel system as well as the internal organization and operations of the Office of Personnel Management. This includes a review of personnel management operations, procedures, practices, methods and controls at the Office of Personnel Management and selected Federal agencies.

Mr. Chairman, from the very beginning of our work, we were aware of the sensitivity of our assignment. We knew that we would be dealing with issues affecting the working life of Federal employees. With this in mind, we developed a "Start Work Statement to Members of the Task Force on Personnel Management", to assure that our review and analysis gave due consideration to fair and equitable treatment of Federal employees. This statement, initially communicated to task force members within two weeks of work start-up was approved by each of our CoChairmen and sets forth the principles which has guided our work throughout the life of our Project. Here is that Statement:

A START WORK STATEMENT TO MEMBERS OF THE TASK FORCE ON PERSONNEL
MANAGEMENT

"Each of us has volunteered to be a part of one of the largest cooperative projects ever attempted; a survey on the Executive Branch of the United States Government in search of ways to improve efficiency and control costs.

"Our group carries a special burden of responsibility and a particularly acute need for sensitivity-not only to the ideals of government service in our democracy but also to the reality of government service as experiencd by over two million Executive Branch employees.

"While scholars are fond of saying things like: 'Ours is a government of law,' it is apparent that even the most perfect laws require people to administer them (just as they require people to abide by them). Governments cannot function without people and when a government is to serve all of its citizens, it must value different qualities in its employees than would a government intended to serve one class, caste, race, family, individual, or idea.

"If the best government attracts the best people and must be able to retain them, then government service must be made attractive for more than just patriotic reasons and in more than plain economic terms. Ideally, we should look for ways of assuring that people in government are neither underpaid, nor underappreciated, nor underutilized. We would seek to create a climate in which government service becomes a privilege as well as an obligation; a climate in which government employment is a satisfying and rewarding experience for those who serve and a cause for respect from those who are served.

"We should seek to provide competitive challenge and compensation, room for growth and paths for advancement, reasonable security, and sufficient opportunities for talented individuals to function and contribute that government itself can continue to improve. We would certainly do everything possible to retain our best, most experienced, and most creative public servants as long as possible.

"As we begin our task, it is important to remember that the government serving its citizenry and supported by that citizenry, must not violate the public's faith. Public funds, subscribed by taxpayer's dollars, must be used wisely. The Federal workforce must be used efficiently and effectively. The costs of government employment must be controlled as much as humanly possible without sacrificing the quality of government performance.

"Government employees are also citizens and taxpayers and they are no more in favor of unnecessary, inefficient, or ineffective government practices than we are. They, however, are better informed on those subjects, and in this cooperative effort, we will rely heavily upon their knowledge and experience.

"This project is vastly ambitious on the surface, but it is even more important than it appears. It has the potential of being a model of what can be achieved through cooperative effort in the private sector to aid the public sector and also by cooperation between government employees and government volunteers.

"We have no way of knowing at this point our efforts will produce suggestions for dramatic improvements in efficiency or in major cost savings. Each of us, however, is privileged to have been asked to participate in this endeavor."

Mr. Chairman, this concludes my statement. I will be pleased to answer questions by you and members of this Committee.

STATEMENT OF SY PRANGER, PROJECT MANAGER, PERSONNEL TASK FORCE, PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL

Mr. PRANGER. Thank you, Mr. Chairman. As you indicated, I have submitted copies of my opening statement. I would much prefer that it be entered in the record, rather than to try to read it. I believe it is rather self-explanatory, in terms of my background and an indication of the makeup of the personnel task force. I would much prefer to go directly to any questions that you may have, sir.

The CHAIRMAN. I wonder if you would like to summarize the key points that you have made in your statement for the record, before we go into questions.

Mr. PRANGER. I will. My name is Sy Pranger. I am Project Manager of the Personnel Task Force of the President's Private Sector Survey on Cost Control. I am a retired senior Federal executive. I worked in the field of personnel management for about 25 years, sir, including 8 years as director of personnel of the Department of Agriculture and my last 3 years as associate director of the Office of Personnel Management.

I have listed in the testimony our three cochairs of the task force. Quickly, they are Don Keough of Coca-Cola; Jack Puelicher of M&I Corp.; and Bob Hatfield of New York Hospital.

As I indicated in the testimony, we have completed two phases of the task force review, the first being the basic organization and orientation of the members, the second was the initial identification of items that we could go into in-depth review during the third phase. It was during this phase two that the work plan was developed for the task force. We are currently in the middle of phase three.

The CHAIRMAN. Excuse me. Would you mind if I interrupted you with some questions as we go along.

Mr. PRANGER. No, sir.

The CHAIRMAN. One of the things we asked the other day, for which I gained no understanding at all, is who develops the work plan?

Mr. PRANGER. The work plan, sir, was developed by the personnel task force, which included myself taking the lead on it, with input from basically all of the professional members of the task force.

The CHAIRMAN. So that was done by your task force, separate from any involvement of the overall

Mr. PRANGER. No involvement whatsoever of the management group. It came out of the task force, sir.

The CHAIRMAN. Is that pursuant to some instruction or understanding you have with respect to the operation of your task force that is common to all of the task forces?

Mr. PRANGER. I cannot talk about the other task forces. It is my understanding that this is what they expected me to do, sir.

The CHAIRMAN. But is there not some common agreed-upon time schedule and sequence of events that includes development of a work plan?

Mr. PRANGER. Yes, sir.

The CHAIRMAN. The words "work plan" seem, in ways that have been described to me, to be words of art now, in terms of the environment of this Commission. A work plan is a specific step in the process.

Mr. PRANGER. I was instructed that it was a specific step in the process.

The CHAIRMAN. Is there a set of criteria developed by the commission for you to follow in setting up your work plan?

Mr. PRANGER. No. There was no format or anything else given to us, sir.

The CHAIRMAN. You had no guidelines as a task force on what they wanted you to look at?

Mr. PRANGER. I have received guidance from both J. P. Bolduc and the other people in the management office of the President's Private Sector Survey, in terms that they are well aware of what is in that work plan, they have given us the basic guidance that we are to use as we proceed on the study.

The CHAIRMAN. Please go ahead.

Mr. PRANGER. AS I indicated, we are in phase three, which is the in-depth review. I have listed the kind of approaches we are using including numerous interviews of Federal managers, all throughout the Government, both career and noncareer, budget documents, reports of GAO, some of the reports of the Congress, including an in-depth review of the so-called Mercer report. We have obviously looked at the CBO reports concerning budget strategies and things like that, as well as statistical information which is currently on the shelf and available from OPM, in terms of the composition of the Federal work force.

The CHAIRMAN. CBO reports?

Mr. PRANGER. The main CBO report was the report, "Reducing the Federal Deficit: A Strategy and Options," which was a report to the House and Senate committees on the budget, the congressional budget.

The CHAIRMAN. When you say Reducing the Federal Deficit, does that report deal with greater efficiency in the operation of OPM? Mr. PRANGER. That report contains several cost control or cost reduction items in it, sir.

The CHAIRMAN. Is that where your work plan picked up the $23 billion in savings-

Mr. PRANGER. Sir, may I make a statement on the work plan? I realize the fact that you have requested copies from Mr. Larkin of the management office of the PPSSCC.

The CHAIRMAN. Please let me make one thing clear to you. I do not quarrel with any of the numbers in the work plan. I do not quarrel with OMB's strategy.

Mr. PRANGER. This is just CBO reports, sir, not OMB.

The CHAIRMAN. The Congressional Budget Office, yes. What I am concerned about is how numbers and the reduction of $23 billion in pension costs get up front as an objective of your task force, when everything setting up the task force says that you are going to look at process and administration, and that is substance.

Mr. PRANGER. You are questioning the wrong person on the question of policy versus operations, Mr. Chairman.

You did, as I understand it, express to the management of 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 the work plan? Why?

Mr. PRANGER. I have been so instructed, sir.

The CHAIRMAN. Who instructed you?

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?