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Performance Based Organizations
Performance-Based Organizations (PBOs) are discrete units that commit to clear objectives, specific measurable goals, customer service standards, and targets for improved performance. Once designated, they would have customized managerial flexibilities and a competitively-hired CEO, who would sign an annual performance agreement with the Secretary and have a share of his or her pay depend on the organization's performance. The British, who have extensive experience with this concept, find that such agencies improve performance and cut administrative costs.
In a PBO, policy-making operations and regulatory functions are split from their program operations. The PBO focuses on programmatic operations. Not all government agencies are suited to become a Performance-Based Organization. Operations that do not have clear, measurable results should be excluded. For example, the foreign policy and planning offices in the State Department or basic scientific research offices at the National Institutes for Health may be inappropriate candidates.
- Prerequisites for Becoming a PBO Candidate:
- Have a clear mission, measurable services, and a performance measurement system in place or in development.
- Generally focus on external, not internal, customers.
- Have a clear line of accountability to an agency head who has policy accountability for the functions.
- Have top level support to transfer a function into a PBO.
- Have predictable sources of funding.
- Proposed PBOs in the President's FY 1998 Budget:
The NPR, OMB, OPM, and the Departments' conversion teams are working on legislative/administrative flexibilities for the potential PBOs listed below. These are but the first phase of a long-term project to develop other PBOs.
| Commerce | Technical Information Dissemination (National Technical Information Service) |
| Commerce | Intellectual Property Rights (Patent and Trademark Office) |
| Commerce | Seafood Inspection (NOAA, NOS) |
| Defense | Defense Commissary Services (Defense Commissary Agency) |
| HUD | Mortgage Insurance Services (Government National Mortgage Association) |
| HUD | Mortgage Insurance Services (Federal Housing Administration) |
| OPM | Retirement Benefit Management Services (Federal Retirement and Insurance Service) |
| Transportation | St. Lawrence Seaway Corporation (St. Lawrence Seaway Development Corporation) |
| Treasury | U.S. Mint |
For more information, contact John Kamensky at the National Performance Review, (202) 694-0009 or e-mail: john.kamensky@npr.gov.
