Archive

_________________________________________________________________________________
Document Name: Department of Commerce
Date: 09/30/93
Owner: National Performance Review
_________________________________________________________________________________

**********************
Department of Commerce
**********************

Accompanying Report
of the National Performance Review

Office of the Vice President

Washington, DC

September 1993

********
Contents
********

Executive Summary 1

Recommendations and Actions
^^^^^^^^^^^^^^^^^^^^^^^^^^^

DOC01: Reinvent Federal Economic
and Regional Development Efforts 5

DOC02: Provide Better Coordination to
Refocus and Leverage Federal
Export Promotion 11

DOC03: Reform the Federal Export Control
System for Commercial Goods 17

DOC04: Strengthen the Tourism Policy Council 23

DOC05: Create Public-Private
Competition for the NOAA Fleet 27

DOC06: Improve Marine Fisheries Management 31

DOC07: Provide EDA Public Works Loan
Guarantees for Infrastructure Assistance 35

DOC08: Establish a Manufacturing
Technology Data Bank 37

DOC09: Expand Electronic Availability
of Census Data 41

DOC10: Amend the Omnibus Trade and
Competitiveness Act to Increase the
Data Quality of the National Trade Data Bank 45

DOC11: Eliminate Legislative Barriers to the
Exchange of Business Data Among
Federal Statistical Agencies 49

DOC12: Establish a Single Civilian Operational
Environmental Polar Satellite Program 53

DOC13: Use Sampling to Minimize the Cost
of the Decennial Census 57

DOC14: Build a Business and Economic Information
Node for the Information Highway 61

DOC15: Increase Access to Capital
for Minority Businesses 63

Agency Reinvention Activities 65
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Summary of Fiscal Impact 71

Appendix
^^^^^^^^

Accompanying Reports of the
National Performance Review 77


*****************
Executive Summary
*****************

The Commerce Department celebrates its 80th birthday as a cabinet-
level department in 1993. During its 80-year history, the department
has grown to employ more than 36,000 people in 13 major operating
units with a fiscal year 1993 budget of approximately $3 billion.
Despite this growth, the Commerce Department still remains the
smallest cabinet-level department in terms of budget.

The department is, in some respects, a holding company composed of
vastly different agencies, each pursuing disparate missions. The
department's 13 operating units have five primary missions:
increasing business and trade promotion; improving the nation's
technological competitiveness; fostering environmental stewardship;
improving economic development; and compiling, analyzing and
disseminating vital national statistical information.

The National Performance Review (NPR) analysis of the Department of
Commerce's Economic Development Administration and other economic
development programs from other agencies revealed that community and
regional development efforts are characterized by fragmentation, poor
quality, and bureaucratization.

To overcome these shortcomings, NPR recommends that the President
create a Federal Coordinating Council for Economic Development
(FCCED). FCCED would consist of the affected cabinet officers and
would be responsible for developing a government-wide strategic plan
and unified budget for carrying out federal economic and regional
development programs.

The export of U.S. goods and services overseas helps to create jobs
at home and ensures that American businesses remain competitive in
the global marketplace.

The NPR recommends that the Trade Promotion Coordinating Committee be
given broader authority to create performance measures for use in
evaluating and funding the approximately 150 federal export promotion
programs, and begin a pilot program to integrate the domestic field
offices of federal agencies that provide export counseling and
finance services. Also, the NPR recommends that the Foreign Service
Officers Corps be leveraged to increase the Foreign Commercial
Service, making it more competitive with the commercial services of
other industrialized nations.

U.S. businesses continue to lose potential export opportunities due
to a cumbersome and outdated export licensing policy. The NPR
recommends that the review, decision and dispute resolution system
for export licensing be reformed to decrease jurisdic-tional disputes
between the agencies involved in this policy area. If implemented,
this change could help generate billions in new exports, create
thousands of new jobs annually and help ensure U.S. competitiveness.

Commerce must break the decade-long deadlock on the role and
responsibility of the National Oceanic and Atmospheric
Administration's (NOAA) fleet. The NPR recommends an experiment with
a program of public/private sector competition.The NPR also
recommends that the department work with Congress and the fishing
industry to rebuild marine fisheries and improve economic health of
the nation's publicly owned and privately used continental shelf
fishery resources.

Timely and effective dissemination of critical trade, economic, and
statistical information to other government agencies and the private
sector is another area in which Commerce must take a government-wide
lead. The NPR recommends that the Secretary support the expansion of
the contents of the National Trade Data Bank and develop an active
marketing campaign to explain its value to American exporters. Com-
merce should also establish a Manufacturing Technology Data Bank to
disseminate critical, precompetitive, government-funded technology
data to U.S. businesses.

Opportunities exist to dramatically reduce the reporting burden
placed on American businesses by federal statistical agencies.
Commerce, in consultation with these other federal agencies, should
institute widespread electronic data gathering from U.S. businesses,
eliminate duplicative requests, and begin shifting reporting
schedules to be more in line with common business practices.
Implementing these recommendations can save business owners tens of
millions of dollars.

The NPR recommends that NOAA, the National Aeronautics and Space
Administration, and the Department of Defense establish a single,
coordinated polar satellite program, as opposed to the current plan
for three systems.

The NPR recognizes that access to credit for minority businesses is a
persistent national problem and recommends that the Department of
Commerce, in cooperation with the Small Business Administration,
increase its efforts to expand credit access for minority small
business.

The NPR also recommends that Commerce work with the Office of
Management and Budget and the Justice Department to remove the
current prohibition on the use of sampling in decennial censuses to
determine the apportionment of Congress. Significant savings will be
achieved in the 2000 decennial if this restriction is removed.

Commerce has begun an internal reinvention program. This effort is
strongly supported by Secretary Brown. The internal Commerce effort
consists of four main phases. First is the idea-generation process.
So far, nearly 8,000 reinvention ideas have been received from
Commerce employees.

Shortly after the idea-generation process, five cross-cutting
programmatic teams were formed to develop recommendations in trade,
economic stimulus, environmental services and research, information,
and technology. The third source of new ideas is a series of focus
group meetings in which nearly 300 managers and employees have
participated. Commerce's fourth reinvention phase is the
establishment of five reinvention laboratories. Many additional
recommendations are being evaluated by Commerce's internal review.

The overall savings and revenues from these recommendations are
estimated at $675 million over the five-year period fiscal year 1995
through 1999.




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Recommendations and Actions
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*************************************
DOC01: Reinvent Federal Economic and
Regional Development Efforts
*************************************


Background
**********

At least seven federal programs assist states and localities with
economic and regional development.(1) The major programs are the
Department of Commerce's Economic Development Administration, the
Department of Agriculture's Rural Development Administration and
Rural Electrification Administration and the Department of Housing
and Urban Development's Community Development Block Grant Program.
Smaller development programs are operated by the Department of
Defense, the Tennessee Valley Authority, and the Appalachian Regional
Commission.

These economic and regional development efforts are characterized by
fragmentation, poor quality, and excessive bureaucracy. In the
absence of a coordinated system that integrates assistance, states
and communities must turn to an assortment of different agencies and
programs. This dispersion of effort makes it difficult for
communities to obtain assistance, limits the development of critical
knowledge, hinders organization, and limits funding for national
efforts. Moreover, many federal programs are poorly run, with
communities facing significant delays in receiving assistance.
Finally, there is no coherent federal policy concerning regional
development and community dislocation. Piecemeal, after-the-fact
responses are the norm.


Department of Commerce
**********************

The Economic Development Agency (EDA) was established in 1965 to aid
economically distressed regions; it soon became the "flagship"
federal agency for regional economic development. EDA principally
funds local public works projects (such as industrial parks, access
roads, and sewer lines), to enable communities to attract industry
from other areas. The agency also provides grants to communities
facing sudden economic distress and funds technical assistance and
economic research. Funding rose until the early 1980s, when the
Reagan and Bush administrations tried to eliminate the program. The
program's current budget is $254 million for fiscal 1994, down from
$830 million in 1980 (in 1992 dollars).

Significant changes in the economic development environment during
the 1980s suggest that EDA's economic development role (as well as
that of other federal programs) needs to be fundamentally rethought.

First, states and localities now have significantly greater economic
development capabilities than they did when EDA was established . As
a result, EDA's "retail" approach to economic development, with its
49 field offices, six regional offices, and 150-person national
office, now duplicates many state and local efforts. Moreover, the
creation or expansion of state and other federal programs means that
EDA is no longer the flagship agency for regional economic
development in the U.S.

Second, EDA's traditional approach to economic development (which
focuses on public works and other infrastructure development) has not
shifted sufficiently to focus on newer efforts such as technology
centers, entrepreneurial development, and manufacturing
modernization.(2) This is in part because EDA funds are divided into
several titles, the largest being Title 1 for public works and
infrastructure.

Finally, EDA's uncertain political support has contributed to a
variety of problems, including reduced morale, lower staff quality,
poor operation and administration of programs, lengthy and
complicated grant approval procedures, and the pursuit of low-risk
policies. Grant applications must go through four levels of review:
an informal review at the Economic Development Representative field
level, a formal review at the regional level, and two final reviews
at the national office.(3) As a result, the EDA approval process is
slower than it should be.


Department of Agriculture
*************************

The Department of Agriculture (USDA)'s Rural Development Agency
(RDA), a recently reconfigured agency formed by the consolidation of
several existing USDA programs, was created to aid in the development
of rural communities. RDA's programs can be divided into three
categories: Water and Waste Disposal, Business and Industry, and
Community Facilities. RDA provides technical assistance and funding
through grants and loans. Water and Waste Disposal funds are
available to public entities such as municipalities, counties,
special purpose districts, Indian tribes, and non-profit
corporations.

Funding includes support for technical assistance and training
grants. RDA provides business and industry assistance through loan
guarantees and loans distributed through intermediaries, such as
state and local government and nonprofit organizations. Loan
guarantees are designed to bolster the local private credit market.
Indirect RDA loans are supposed to go to business facilities and
community development. Community Facilities funds are for the purpose
of improving essential services in rural areas. Eligibility is the
same as for Waste Disposal.

As stated, RDA makes grants, direct loans, indirect loans (through
cities, states, and nonprofits), and also guarantees loans. In fiscal
year 1994, out of a total budget appropriation of $913 million, RDA
received budget authority of $264 million for loan levels of $1.85
billion. The money for direct loans, usually 30-year, long-term
loans, is borrowed from the Treasury Department. Indirect loans,
provided through state and local government, are paid back to RDA by
the state and local governments themselves. Guarantees are also
provided to commercial banks and work similarly to guaranteed student
loans.

Many of RDA's programs provide emergency assistance for events such
as tropical storms, earthquakes, or flooding. The Federal Emergency
Management Agency is best equipped to handle these functions.

The Rural Electrification Administration (REA) was created under the
New Deal as part of a general program of unemployment relief, with
the goal of providing electricity service to the countryside. REA has
continued to provide financing for the provision of electric service;
in 1950, it began to provide financing for telephone service as well.
In addition, in 1989 REA initiated the Rural Economic Development
Program, which provides loans for job creation in rural areas.

The Clinton administration has already proposed virtually eliminating
REA's low-interest loan program for electric cooperatives and
telephone companies, which would save an estimated $374 million over
four years.


Department of Housing and Urban Development
*******************************************

The Department of Housing and Urban Development (HUD) administers the
Community Development Block Grant Program (CDBG). CDBG is broken up
into entitlement and non-entitlement sections. Both programs have the
primary objective of developing viable communities by providing
decent housing and expanding economic opportunities, principally for
low- and moderate-income persons. Seventy percent of CDBG
appropriations are direct entitlements to large metropolitan cities
and urban counties. Non-entitlement spending, otherwise known as the
Small Cities Program, is slightly less than 30 percent of CDBG
appropriations and is appropriated to states who then make grants to
small local governments to carry out development activities.


Other Federal Programs
**********************

The Department of Defense's Office of Economic Adjustment (OEA)
assists communities in planning for defense conversion. However,
because federal support for the implementation of these plans comes
from different agencies, particularly EDA, it is difficult to develop
coordinated defense conversion strategies.

The Tennessee Valley Authority (TVA) is responsible for the
maintenance and management of a broad array of public lands, physical
facilities and natural resources. In addition, it directly supports
economic development through business assistance, economic planning,
education, environmental planning, agriculture assistance, tourism
promotion, and minority business development.

The Appalachian Regional Commission (ARC) is a federal-state
government agency concerned with the economic, physical, and social
development of the 13-state Appalachian region. ARC's comprehensive
goals are to improve the health and job skills of the people of
Appalachia. ARC concentrates on community and industrial development
as well as housing, education, health, and tourism.

Both TVA and ARC were created at a time when state capacities were
limited. However, state capacities are much greater now. The nation
no longer needs area-specific development commissions.

The federal government no longer effectively guides and supports
regional development. For example, the proliferation of federal
programs supporting economic development makes it difficult for
states and localities to obtain assistance easily. Knowing where to
look and how to apply can be challenging for the most knowledgeable
state or local government official. When governments need assistance
in more than one area (e.g., defense conversion, rural development,
or business assistance), the maze becomes even more complex. Federal
economic and regional development programs do not operate as one-stop
shops. This makes it difficult for the federal government to focus
its resources on pressing problems such as defense conversion, for
which a number of agencies provide help.

In addition, the lack of innovation and consistency in federal policy
has contributed to the ineffectiveness of many state and local
economic development programs. For example, much of the money states
now spend on economic and regional development is for "zero-sum"
industrial recruitment activities. Individual states may benefit from
industrial recruitment activities, but when one state wins another
loses. No net benefit accrues to the nation as a whole because
business investment is not increasing; it is simply being shifted
among regions.

Moreover, much of this money subsidizes foreign firms that have
already decided to locate branch plants in the United States. For
example, states and cities gave more than $1 billion to foreign
automobile firms between 1978 and 1992.(4)

Federal policy has not changed to meet modern economic realities;
instead it has persisted in a fragmented, programmatic approach to
development. These actions have hindered, rather than fostered, a
consistent and integrated federal, state, and local effort toward
regional development.

Regional economic distress must be a federal priority if the nation
is to manage economic structural change effectively. At least two
reasons underlie this need. First, an uneven national pattern of
regional growth and decline is inefficient and costly. In some
places, resources sit idle and under-used, while others suffer from
the negative effects of growth, such as congestion and high costs.

This less-than-optimal use of public and private resources reduces
the efficiency not only of declining communities, but of the U.S .
economy as a whole.

Second, community economic decline imposes social, psychological, and
physical distress on area residents. Caught in a downward spiral,
communities may find it impossible to regain former levels of
prosperity unless they receive economic assistance. Federal support
can help these communities and regions stem further decline and build
a solid base for recovery.

Although state and local government efforts have made significant
strides in addressing local economic concerns, they are not an
adequate replacement for a strong federal presence, particularly
given today's economic realities of increased international
competition and rapid changes in technology. The U.S. government
should revitalize its commitment to regional economic development in
a manner that guides and supports state and local efforts to achieve
the best possible practices and results.


Action
******

The President should create a Federal Coordinating Council for
Economic Development (FCCED).

The FCCED would consist of the cabinet officers or directors of the
affected agencies (i.e., Department of Commerce, Department of
Agriculture, Department of Housing and Urban Development, Appalachian
Regional Commission, and the Tennessee Valley Authority) or their
representatives.

The FCCED would provide a unifying framework to coordinate the
economic and regional development activities of the U.S. government,
and to develop a governmentwide strategic plan and unified budget for
carrying out federal economic and regional development programs. The
FCCED would:

--- Coordinate federal economic development policies and programs;

--- Provide a central source of information for states and localities
on federal economic development programs;

--- Coordinate official economic development efforts to ensure better
delivery of these services to the public;

--- Prevent unnecessary duplication in federal economic and regional
development activities;

--- Assess the appropriate levels and allocation of resources among
agencies in support of economic and regional development and provide
recommendations to the President based on its assessment; and

--- Carry out such other duties as are deemed to be consistent with
the purposes of the FCCED.


Implications
************

The federal government currently possesses a broad menu of economic
and regional development programs but is not adequately organized or
coordinated to meet the needs of the states and local communities.
This recommendation would help ensure that the needs of states and
local communities would be better met and that, ultimately, more jobs
would be created. Further, a stronger and more effective federal-
state relationship on economic development issues would be
established.


Fiscal Impact
*************

This recommendation is budget neutral; however, the coordination of
the delivery of economic and regional development services and a
clearer delineation of agency roles should produce savings.


Endnotes
********

1. These are distinct from other programs designed to help states and
localities with issues such as law enforcement, education, and social
services. This brief also distinguishes between programs focused on
economic and regional development and those focused on urban
revitalization. The former are focused on distressed regions and
areas suffering from long-term economic decline or economic dis
locations. The latter programs focus on the redevelopment of blighted
or distressed urbanized areas and neighborhoods that may be located
even in reasonably health metropolitan regions.

2. U.S. Congress, Office of Technology Assessment (OTA), After the
Cold War: Living With Lower Defense Spending, OTA-ITE-524
(Washington, D .C., February 1992), p. 175.

3. In 1989, EDA's 360 staff members manage 820 projects, an average
of 2.2 projects per person.

4. See OTA.




**********************************************
DOC02: Provide Better Coordination to Refocus
and Leverage Federal Export Promotion
**********************************************


Background
**********

Unlike most of our economic competitors, the United States does not
possess an export strategy or an export infrastructure capable of
assisting U.S. businesses interested in pursuing global
opportunities.(1) Export programs are fragmented among 19 federal
agencies, 10 of which possess substantial export promotion budgets.
The Departments of Agriculture, Commerce, State, Energy, and
Interior; the Agency for International Development; the Export-Import
Bank; the National Aeronautics and Space Administration; the Overseas
Private Investment Corporation; the Small Business Administration;
and the U.S. Trade and Development Agency all play major roles.
Partially as a result of this fragmentation, the U.S. continues to
lag far behind other industrialized nations in exports as a percent
of Gross Domestic Product.(2)

The export of U.S. manufactured goods helps U.S. industries remain
competitive in the global marketplace and create jobs at home. The
Department of Commerce estimates that every additional billion
dollars of U.S. exports creates 20,000 new jobs. In fact, most of the
growth of the U.S. economy over the past few years is directly
attributable to exports, as is almost all growth in America's high-
wage manufacturing sectors.(3)

Today, 14 million U.S. jobs are supported through exports.(4)
Unfortunately, despite the vast number of manufacturing companies
that could compete in the global marketplace, only 2 percent of U.S.
businesses account for 85 percent of U.S. exports.(5) These companies
are primarily large U.S. multinational corporations that have the
resources to compete internationally. Census Bureau figures show that
the top 10,000 exporters are responsible for 96 percent of U.S.
exports, while the other 94,000 corporations account for the rest
.(6) Even among the top exporters, only 5,000 U.S. companies have
annual export sales of more than $5 million.(7) Most shipments, 72
per- cent, are worth less than $20,000.(8)

Thousands of small and medium-sized manufacturing firms recognize
that their products are internationally competitive, but due to high
transaction costs and sometimes a lack of information, they are
unable to tap into new markets. In this context the United States has
been referred to as the "world's biggest export underachiever." (9)
In an effort to rectify this problem, the government operates more
than 150 programs designed to assist American businesses sell their
manufactured goods overseas. So far, this effort has not been
successful for a number of reasons.

Historically, the United States has focused federal export program
dollars on the promotion of agricultural products. In 1982, the U.S.
exported more than $36 billion worth of agricultural goods, which
represented 17 percent of all U.S. exports.(10) By 1992, after
another decade in which the federal government poured billions more
into agricultural export programs, U.S. agricultural exports had
actually decreased to 10 percent of total U.S. exports, while the
share of machinery and other manufactured goods exported showed a
steady increase.(11) Commerce Department figures indicate that of the
7.2 million jobs supported by exports in 1990, 46 percent were in the
manufacturing sector, while 8 percent were in the agricultural
sector.(12) Yet in 1991, the General Accounting Office (GAO) reported
that, although agricultural products accounted for only a small
percentage of overall U.S. exports, the Department of Agriculture
continued to receive approximately 70 percent of the $2.7 billion
federal export promotion budget.(13)

This disparity has had a detrimental effect on other federal export
promotion programs. Compared to the Japanese and most of our major
European trading partners, the U.S. spends the least on helping its
businesses compete internationally. For every billion dollars of
manufactured goods exported overseas, the U.S. spent 59 cents, while
France spent $1.99 and Italy spent $1.71 per billion.(14) In terms of
human resources devoted to assisting U.S. business with trade lead
information, advocacy, and other assistance overseas, the U.S. record
is also poor.

The U.S. and Foreign Commercial Service (US&FCS), part of the
Department of Commerce's International Trade Administration (ITA), is
the leading government agency devoted to helping U.S. businesses
promote themselves internationally. Despite presences in 70 nations
and 47 district offices in the United States, the US&FCS has been
continually criticized for not doing enough to promote U.S. business
interests. Critics of the US&FCS argue that it should be abolished
because federal employees do not adequately understand the needs of
business people. Others maintain that, with only 200 US&FCS officers
spread throughout the world--an average of less than two people per
post--the US&FCS has never had a chance to be effective. In
comparison, the Japanese, through the Japan Export Trading
Organization (JETRO), field more than 150 trade experts in the United
States. The U.S. currently has 15 US&FCS officers and 44 Foreign
Service Nationals stationed in Japan.(15)

The federal government's inability to provide for a stronger overseas
presence has created a leadership vacuum that state governments are
attempting to fill. State trade offices overseas have proliferated.
The National Association of State Development Agencies (NASDA)
reports that in 1990, state governments spent more than $90 million
annually on international economic activities, more than four times
what they had spent in 1984.(16) About one-third of these funds, $33
million, was spent to support 163 state-run foreign office
locations.(17) Even more disconcerting than the total number is the
fact that only nine of these state offices were located in cities
without a US&FCS office, and that at least seven offices were
partially funded by private donations.(18)

Although these state offices were initially created to attract
foreign investment, today they devote an average of only 30 percent
of their time to that task. In an attempt to fill the void created by
inadequate federal support and leadership, the states have continued
to attempt to bolster their domestic industries by creating programs
to duplicate what the US&FCS was mandated to do.

Duplication of effort is endemic, not only in the relationship
between the states and the US&FCS, but also among other domestic
federal export promotion programs. Currently, three agencies share
primary responsibility for delivering export counseling and finance
services. The Export-Import Bank is responsible for helping
businesses finance their exports; the Small Business Administration
(SBA) helps small businesses assess their exporting capabilities and
provides financing assistance; and the Department of Commerce,
through the domestic offices of the US&FCS, provides small and
medium-sized U.S. businesses with counseling, trade mission, and
trade lead information.

According to critics, trade finance services, especially financial
advice and information, are not disseminated efficiently because the
Export-Import Bank has a small staff and is not able to market its
services. At the same time, the SBA, with its huge domestic network
of field offices, has not made the Export Revolving Line of Credit a
priority.(19) Export counseling, primarily the responsibility of the
regional and district offices of the US&FCS, is in some cases
duplicated by SBA's field structure and local state economic
development agencies.(20) Essentially, each of these agencies
attempts to service overlapping segments of the same group of
customers instead of presenting a coordinated effort.

The duplication and fragmentation found within the entire federal
export bureaucracy is mirrored within the Commerce Department itself.
Commerce should strive to ensure that its own ITA does as much as
possible to promote the sale of manufactured goods.

A business that contacts the Department of Commerce directly may
become lost within the maze of ITA subdivisions. Composed of the
US&FCS, International Economic Policy (IEP), Trade Development (TD),
and Import Administration bureaus, ITA's mission is to promote U.S.
industrial exports. According to a recent Commerce Department
Inspector General's report, ITA's organizational structure encourages
overlap.(21) It allows each division to help promote exports,
diffusing responsibility for this task and leading to mission
confusion among ITA employees, "turf" battles between divisions, and
confusion among customers. Anecdotal evidence also suggests that the
country desk officers and analysts within IEP who focus on specific
countries, are out of necessity also becoming industry experts--the
role of TD analysts--because of the lack of communication among the
divisions.

In an attempt to solve the problems of federal export promotion
program duplication and resource allocation, the Trade Promotion
Coordinating Committee (TPCC) was created by executive order in 1990.
Its mandate was to define areas of overlap and streamline federal
export promotion activities. The Bush Administration did very little
with the TPCC. By 1992, it became clear that the TPCC needed more
power to fulfill its mandate, and the committee received additional
statutory authority under the Export Enhancement Act of 1992 .

The TPCC will present a report to Congress on September 30, 1993,
outlining a national strategy for export promotion, proposing ideas
for eliminating program duplication, and developing a unified budget
for export promotion activities. Proponents of the TPCC believe that
it will become an effective vehicle to enhance and coordinate the
fragmented federal export promotion effort.

In sum, the federal government is not using its resources in an
efficient manner to meet the needs of small and medium-sized
businesses interested in exporting their products overseas. The lack
of federal coordination and leadership has led to duplicated efforts
between federal agencies and state governments and has caused
confusion among customers. Although export promotion programs cannot
by themselves alter the U.S. trade imbalance, which is influenced by
macroeconomic and financial policies, the federal government can
provide businesses with technical and representational assistance as
well as export financing. If small and medium-sized U.S. businesses
are to compete in the global marketplace, the federal government must
begin to reallocate its resources to sectors that have clearly shown
growth potential while it works to make its services more accessible
to its clients.



Actions
*******

1. The President should issue an Executive Order to grant the TPCC
broader authority to control federal export promotion efforts.

The TPCC should be given additional authority to create performance
measurements and goals and to use them for program evaluation across
all federal export promotion programs. This structure would give the
TPCC the power to move beyond its current role of coordinator and
become a stronger mechanism for the Department of Commerce to
facilitate interagency communication and cooperation. The TPCC should
work closely with the National Economic Council (NEC), which would
oversee the resource reallocation process for federal export
promotion resources to be incorporated into the Office of Management
and Budget's (OMB) annual budget process. The NEC would use TPCC's
program evaluation results to oversee the creation and implementation
of unified export promotion budget.


2. The TPCC should establish a pilot program to physically integrate
the domestic field offices of federal agencies that provide export
counseling and finance services.

In 12 U.S. cities, Department of Commerce US&FCS district officials
are located in the same building with Small Business Administration
loan officers. Integrating these international trade counselors with
financial experts will eliminate the need for prospective U .S.
exporters to visit multiple government offices to get the information
they need. This pilot program should last for at least one year,
after which time a report should be prepared for the Secretary of
Commerce (as chair of the TPCC) outlining the program's
effectiveness.

This proposal to create "one-stop shops" is consistent with the
strategic vision currently being developed by the TPCC. That vision
provides for a new, more focused domestic Commerce Department program
as part of a consistent national approach in which, over time, the
federal government will shift from providing export services directly
to the client to providing the means and support to state and local
governments, as well as the private sector, to do the same. This will
help to facilitate a better public-private partnership.


3. A Recruiting Program should be established through the TPCC to
increase the Foreign Commercial Service Officer Corps.

Compared to our major trading partners, the United States spends less
and does less to assist new or potential exporters. To rectify this
problem, Foreign Service officers from federal agencies whose
missions have changed due to the end of the Cold War should be
transferred or placed on long-term rotation to the overseas field
posts of the US&FCS. This would not increase government costs. A
recruiting program should be created to transfer or rotate competent
Foreign Service officers who are interested in business promotion
from the Agency for International Development, the U.S. Information
Agency, and potentially the State Department.


4. The Department of Commerce should create regional and industry
specific task forces within its ITA.

ITA, currently composed of the US&FCS, International Economic Policy
(IEP) and Trade Development (TD) divisions, operates under a matrix
structure that attempts to leverage country, industry, and export
promotion expertise. Trade Development focuses on industry analysis;
International Economic Policy provides country-specific information
to businesses; and US&FCS's mission is to lead the promotion of U.S.
industry overseas. However, each division plays a part in ITA's
overall trade promotion strategy.

This kind of programmatic overlap has caused mission confusion within
ITA. According to a recent Inspector General report and interviews
conducted by the National Performance Review, the divisions are not
working well together, and International Economic Policy country desk
officers are becoming industry experts because of a lack of
coordination between IEP and TD. ITA should create regionally or
industry focused task forces that would bring country and industry
analysts together to create a more synergistic and team-oriented
environment within ITA.


Implications ************

The federal government currently possesses a broad menu of export
promotion and financing programs but is not organized or coordinated
to meet the needs of U.S. businesses. These recommendations will help
ensure that those needs are met, potentially increasing both the
volume of U.S. exports and the number of U.S. exporters. This in turn
will help create new jobs in the United States and, by changing the
way the government delivers these services to the private sector, a
more effective public-private partnership.


Fiscal Impact
*************

These recommendations are budget- neutral, but the creation of "one-
stop shops," the coordination of export promotion service delivery,
and the delineation of agency roles, should produce significant
savings in terms of spending and personnel. According to a recent
return-on-investment analysis study, which indicated that a US&FCS
dollar spent on export promotion returns $2.88 to the Treasury in
additional personal and corporate income tax revenues, the expected
annual return would be $29 million.(22) Furthermore, enhanced U.S.
exports resulting from these actions will have a positive effect on
U.S. trade balances.


Endnotes
********

1. The Trade Promotion Coordinating Committee (TPCC) will present a
report to Congress on September 30, 1993, that will outline a
strategic plan and set of priorities for federal activities in
support of U.S. exports. For further information on TPCC's purpose
and duties, see the Export Enhancement Act of 1992, P.L. 102-429
(October 21, 1992).

2. See U.S. General Accounting Office, Export Promotion: A Comparison
of Programs in Five Industrialized Nations, GGD-92-97 (Washington,
D.C.: U.S. General Accounting Office [GAO], June 1992).

3. Garten, Jeffrey E., "Clinton's Emerging Trade Policy: Act One,
Scene One," Foreign Affairs, vol. 72, no. 3 (Summer 1993), p. 183.

4. Ibid.

5. Stroh, Leslie, The Exporter: The Magazine for the Business of
Exporting, vol. 13, issue 12 (March 1993), p. 2. (Editorial.)

6. "52 Percent of All U.S. Export Shipments are Valued at Less than
$10,000, Contrary to Popular Belief that All Exports are Big Ticket,"
Trade Data Reports, Inc. (October 1, 1992). (Press release.)

7. Ibid.

8. Ibid.

9. Nothdurft, William, "It's Time the U.S. Got Serious About
Exporting," The Northwest Report (St. Paul, MN: Northwest Area
Foundation, undated), pp. 28-31.

10. U.S. Department of Commerce, Bureau of the Census, Statistical
Abstract of the United States, 1992 (Washington, D.C.), p. 658.

11. Ibid., p. 746.

12. Davis, Lester A., U.S. Department of Commerce, Economics and
Statistical Administration, Office of the Chief Economist, U.S. Jobs
Supported by Merchandise Exports (Washington, D.C., April 1992), p.
21.

13. U.S. Congress, House, Committee on Government Operations,
Subcommittee on Commerce, Consumer, and Monetary Affairs, "Export
Promotion: U.S. Programs Lack Coherence," statement of Allan I.
Mendelowitz, U.S. General Accounting Office, Washington, D.C., March
4, 1992, p. 2.

14. U.S. Congress, House, Committee on Government Operations,
Subcommittee on Commerce, Consumer, and Monetary Affairs, "Export
Promotion: U.S. Programs Lack Coherence," statement of Allan I.
Mendelowitz, U.S. General Accounting Office, Washington, D.C., March
15, 1992, p. 15.

15. Telephone interview with U.S. Department of Commerce's Japan
Export Information Center, July 1993.

16. Nothdurft, p. 90.

17. Ibid.

18. Telephone interview with Carol Conway, Executive Editor,
Clearinghouse on State International Policies, Research Triangle
Park, North Carolina, July 1993.

19. U.S. General Accounting Office, Export Promotion: Improving Small
Businesses' Access to Federal Programs (Washington D.C.: GAO, April
28, 1993), pp. 10-11.

20. See U.S. Congress, Mendelowitz statement of March 15, 1992.

21. U.S. Department of Commerce, Office of the Inspector General,
Assessment of Commerce's Efforts in Helping U.S. Firms Meet the
Export Challenges of the 1990s (Washington, D.C., March 1993).

22. U.S. Department of Commerce figures.




*****************************************
DOC03: Reform the Federal Export Control
System for Commercial Goods
*****************************************


Background
**********

The current dual-use export control system used by the United States
was created to protect national security by preventing
technologically sensitive commercial goods from being used for
military purposes by potential Soviet-bloc adversaries. In this
regard, it is a relic of the Cold War and should be changed to
reflect today's nonproliferation security challenges and to recognize
the realities of competing in the global marketplace. Once an
effective tool, the current system now hampers U.S. economic
competitiveness and lacks the focus needed to ensure effective
opposition to the proliferation of weapons of mass destruction.

Established in 1949 at the Cold War's beginning, the Export Control
Act sought to maintain the technological superiority of the United
States and NATO allies over the Soviet Union and Eastern Bloc by
denying them access to sophisticated commercial goods whose value-
added technology could be used for military purposes.(1) To ensure
that this strategy would be successful in stopping the flow of dual-
use goods to Communist nations, the U.S. and NATO allies formed a
multilateral control regime called COCOM (Coordinating Committee on
Multilateral Export Controls) that sought to harmonize the
international procedures and standards by which commercial and
military items would be restricted.

The late 1960s and 1970s saw a dramatic rise in the use of export
controls to oppose human rights violations and terrorism and to help
counter proliferation. By 1969, it had also become apparent that U.S.
commercial competitiveness was being hampered by the export control
process. The act was revised to decontrol commercial items readily
available on the world market. This revision marked the first time
the U.S. government officially recognized the necessity of balancing
commercial and national security interests.(2) In response to the
Soviet invasion of Afghanistan, the 1979 revision of the act
reflected increased East-West tensions and sought to strengthen
controls on the export of commercial goods and technologies in order
to maintain strategic and economic advantages.(3)

The early part of the 1980s saw little change in the international
political system, and thus little change in U.S. export control
policies. However, by the mid-1980s, more multilateral agreements
were created to control the proliferation of chemical, biological,
and nuclear weapons, as well as missile technology. The creation of
these agreements kept military concerns at the forefront of the U.S.
export control policy and helped to institutionalize jurisdictional
conflicts between the State Department, responsible under the Arms
Export Control Act for restricting the flow of munitions abroad, and
the Commerce Department, responsible under the Export Administration
Act for restricting dual-use commercial goods. The State Department,
through the International Traffic in Arms Regulations (ITAR) which
fall under the Arms Export Control Act, also regulates about $6
billion in commercial arms sales annually.

Industry sources recently complained to the State Department that,
because it has not revised the ITAR since 1985, too many commercial
items are controlled by the Munitions List, which specifies items
that are primarily military in nature.(4) In fact, anecdotal evidence
indicates that, in some instances, an exporter has received an export
license from the Commerce Department only to learn at the border that
the product also falls under the jurisdiction of the Munitions List
and requires a State Department license. Currently, no formal system
exists to resolve these jurisdictional disputes.

The changing international situation has not yet prompted the
government to create a revised set of export control policies that
accurately reflect current international political and economic
realities, including the fact that our security interests are
increasingly dependent on global economic competitiveness.(5) Experts
in both the private and public sectors agree that the current system
is still based on high-volume, Cold War-era export controls.
Previously, less than 20 percent of all applications were referred to
other agencies for review. Such referrals were due primarily to
concerns that these dual-use goods might be diverted to the Soviet
Union for military purposes.

Today, with the break-up of the Soviet Union, concerns about the
worldwide proliferation of weapons of mass destruction have
increased. More than 50 percent of all commercial applications
currently received by the Commerce Department's Bureau of Export
Administration (BXA) are referred to other agencies due to end-user
concerns and potential applicability to the construction of nuclear,
chemical, and biological weapons and ballistic missiles.(6) As a
result, export licensing processing times have doubled in the past
two years. On average, referred cases require six times longer to
process.(7) Such licenses are routinely delayed for three months and
longer.

One reason for these delays may be attributed to BXA's current
organization and staffing patterns. BXA is equipped to meet Cold War-
era needs and lacks certain technical skills and expertise that could
help ensure speedy and accurate licensing decisions in the current
exporting environment. At any rate, such delays can hurt companies'
marketing strategies and create the impression that U.S. firms are
unreliable suppliers. The current decentralized system, with its
multiple licensing groups and unclear lines of authority, is baffling
to many exporters. Industry sources have complained that export
control regulations are confusing and that their responsibilities
under new nonproliferation regulations require clarification.

According to some estimates, up to 40 percent of all goods
manufactured in the U.S. require a license before they can be
exported.(8) The computer industry reports that 70 percent of all
export licenses are for computer-related products.(9) Today, although
millions of Americans owe their jobs to exports, the export control
system has not been able to keep pace, causing the nation to lose
sales, jobs, and tax revenue.(10)

However, calculating the economic impact of such controls is
difficult. Most studies do not include potential savings in defense
spending due to continued U.S. technological advantages, or the costs
of maintaining the present export control bureaucracy. Some industry
groups believe that the U.S. loses up to $20 billion in sales
annually because of these controls. According to industry estimates,
this figure translates into as many as 400,000 potential U.S.
jobs.(11)

The current process has been described as "a maze." When a company
applies for a commercial export license, the interagency decision-
making and referral process can allow the license to languish. At
least five cabinet departments, five interagency working groups, the
intelligence community, a number of interagency escalation groups,
the National Security and National Economic Councils, and ultimately
even the President may take part in the process.

While the current system provides a time limit for agency review (as
outlined in National Security Directive 53) that generally has worked
efficiently, delays still occur, especially in the cases of
precedent-setting license applications or jurisdictional conflicts
between the Commerce Department's dual-use Control List and the State
Department's Munitions List. Anecdotal evidence indicates that delays
for some industries have become so acute that a number of U.S.
multinational corporations have lawfully circumvented U.S. controls
by shipping products through other COCOM countries such as Canada,
saving two to three months in shipping time.

Another problem for business has been that of timely control-list
review. The Commerce Department's control list is reviewed every
year, which may not be fast enough for the computer industry's short
product life-cycles. Although it is regarded as an exceptional case,
the current definition of "super-computer" restricts U.S. sales of
widely used and available work-station computers. Restricting sales
of these computers by U.S. firms, in a $10 billion industry expected
to double in volume by 1997, only harms the nation's industrial
competitiveness and economic security.(12)

Although the U.S. coordinates most controls with its allies within
existing multilateral agreements, it sometimes imposes unilateral
controls either for national security or foreign policy reasons.
While unilateral policies and controls sometimes are appropriate,
long-term unilateral controls place U.S. firms at a significant
disadvantage if they are not adopted multilaterally.(13) At present,
the government does not perform any type of cost-benefit analysis to
determine the effect of unilateral controls on the domestic economy
in general or on specific industries.

While export controls are still an essential element of U.S. national
security policy, today's licensing process for commercial goods is
widely criticized as cumbersome, bureaucratic, and confusing. Citing
such concerns, 28 members of Congress recently sent President Clinton
a letter urging the administration to change the current export
control process. Although progress has been made, a 1991 National
Academy of Sciences study also stated that the U.S. has ". . .
continued to drive the vehicle of export control policy while looking
in the rearview mirror . . ." and is basing its policy on ". . . a
set of assumptions about American economic, technical, and political
influence that, while certainly true for the first two decades or so
following the Second World War . . . simply no longer reflects
prevailing global circumstances." (14)

Clearly, the export control system must change to reflect current
security priorities. Specifically, it should focus on non-
proliferation concerns and balance this interest with U.S. economic
priorities, by placing a high priority on the competitiveness of
industries that contribute to U.S. national security. A new export
control system should establish clear lines of accountability to
resolve interagency disputes in a timely and effective manner. It
also should clearly define agency roles and jurisdictions concerning
control lists, and incorporate timely reviews of control lists.
Lastly, while unilateral controls will always remain a valid foreign
policy option, they should be imposed only under narrowly defined
conditions.


Actions
*******

1. The President should direct that the decision and dispute
resolution system for export licensing applications be overhauled.

This revision should provide clear accountability for the efficient
functioning and management of the export licensing system. The
Commerce and State Departments should work to streamline their
internal licensing procedures and maintain responsibility for
chairing the licensing committees and dispute resolution mechanisms
under their purview. Processing times for dual-use licenses that have
not been referred to other agencies should be completed within nine
days. Processing times for more complicated applications requiring
referrals should be reduced at least 25 percent, from 120 days to 90
days. Other agencies involved in the referral process (e.g. the
Departments of State, Defense, and Energy) should be allowed no more
than 20 days to review any pending license before being required to
transfer the license to an interagency dispute resolution group for a
decision.(15) Moreover, to help forge a better public-private
partnership, each agency should designate a senior official as the
principal contact person for exporters or other interested parties
who wish to raise concerns about export control issues.


2. The President should direct the Secretaries of Commerce and State
and the Assistants to the President for National Security Affairs and
Economic Policy to create an effective jurisdictional dispute
resolution process to reduce confusion caused by the overlap between
the State Department's Munitions List and the Commerce Department's
Control List.

As illustrated above, the licensing jurisdictions of the Departments
of State and Commerce overlap in a number of areas. While progress
has been made toward limiting these areas of overlap, licensing
jurisdictional questions still cause considerable confusion for
exporters. Shipments occasionally are halted by the U.S. Customs
Service due to uncertainties concerning the correct agency licensing
requirements.

A timely and effective dispute resolution process should be created
through the NEC/NSC that would help to rationalize the two systems.
This process also should include a study of the feasibility of "one-
stop shopping" for export licensing, designation of one agency as the
entry-point for all license applications, consolidation of
administrative functions, and creation of a uniform application form.


3. The President should direct that the control lists be examined to
ensure that only the most sensitive items remain restricted. Further,
controls should be implemented multilaterally whenever possible, and
the NEC should conduct an assessment on unilateral controls.

With the end of the Cold War, the existing export control list should
be examined carefully to ensure that it reflects current security
concerns. Controls on widely available goods such as work-station
computers should be reviewed to ensure that continued controls serve
modern security concerns.

Because export controls can be effective only when they are imposed
multilaterally by all supplier nations, unilateral controls should be
avoided in all but the most pressing circumstances. Whenever
unilateral controls are imposed, the NEC should be directed to
conduct an economic assessment of their consequences to U.S.
industries so that their full costs can be properly weighed.


4. The President should direct the appropriate Cabinet Secretaries to
create an integrated database for dual-use and munitions export
licenses.

To improve interagency review and communications and the overall
licensing process, agencies involved in export control should begin
to upgrade and integrate their data systems.


5. The Commerce Department's Bureau of Export Administration (BXA)
should adapt its operations to the changing nature of export
controls.

BXA should realign its programs to improve its credibility with
customers by providing clear and concise regulations and timely
export control information. BXA should also consolidate and increase
its technical resources to ensure that all available expertise is
brought to bear on critical nonproliferation export control issues.
BXA should use its resources to train other nations, especially the
newly independent states produced by the breakup of the U.S.S.R., in
the complexities of dual-use export controls. Better use of resources
in this area will help to preclude the proliferation of weapons of
mass destruction through the supply of sensitive items from the
former Soviet Union.


Implications
************

Implementation of these recommendations would help to balance
competing economic and military considerations and create clearer
lines of responsibility and authority by decreasing jurisdictional
disputes between agencies. In the long term, these changes also would
help to foster a better partnership between government and industry
and ensure that U.S. industries remain competitive in the global
marketplace.


Fiscal Impact
*************

The full fiscal impact of these recommendations is difficult to
estimate. The purpose of these improvements is to lessen
inefficiencies within the federal export control system by
rationalizing and streamlining the process and bringing disparate
computer systems together. These changes should help U.S. companies
become more competitive so that they can create new jobs at home.


Endnotes
********

1. U.S. Congress, House, Committee on Foreign Affairs, Subcommittee
on Economic Policy, Trade and Environment, statement by Dr. John
Steinbruner, "The Reauthorization of the Export Administration Act,"
June 23, 1993.

2. National Academy of Sciences, Finding Common Ground: U.S. Export
Controls In A Changed Global Environment (Washington, D.C.: National
Academy Press, 1991), p. 313.

3. Ibid., pp. 313-314.

4. The ITAR was republished in the Federal Register on July 22, 1993.
Officials at the Commerce Department have indicated that the revised
list continues to control many dual-use items.

5. See U.S. Congress.

6. U.S. Department of Commerce, Bureau of Export Administration
figures.

7. Ibid.

8. See National Association of Manufacturers, "Export Control
Questionnaire," Report to Members (July 17, 1992).

9. The Computer Systems Policy Project, Keeping Pace with Change
(Washington D.C., June 4, 1993).

10. McNealy, Scott, "These Restrictions Do Not Compute," Wall Street
Journal (June 16, 1993), p. A7.

11. U.S. Department of Commerce reports that every $1 billion of new
exports generates approximately 20,000 jobs.

12. McNealy, p. A12.

13. National Academy of Sciences, p. 132.

14. Ibid., p. 319.

15. This time limit for review would ensure that pending license
applications are moved through the process in a timely and efficient
manner. The State Department would retain sole authority to designate
items to be controlled under the U.S. Munitions List. Disputes over
list jurisdiction would be resolved through the process to be created
under Action 3 of this recommendation.




*********************************************
DOC04: Strengthen the Tourism Policy Council
*********************************************


Background
**********

The impact of tourism on the U.S. economy should not be
underestimated. Tourism ranks as the first, second, or third largest
employer in 37 states; it is the largest employer in 13 states. In
1992, tourism was the second-largest employer in the U.S. as a whole.
In the past decade, the travel industry created jobs at twice the
average rate of all U.S. industries. The industry leads the nation in
its employment of women and minorities.

In 1992, domestic and international travelers spent $361 billion in
the U.S. on air, bus, taxi, ship, and rail travel; hotel and motel
accommodations; camping; food and drink; retail purchases; and
amusement and recreation services. This amounted to an estimated 6
percent of the Gross National Product. In the same year, domestic and
international travelers paid nearly $51 billion in U.S. taxes,
compared to $32 billion in 1986. International tourism is
particularly important to the U.S. balance of payments, resulting in
a surplus of more than $20 billion in 1992 and supporting 5.9 million
U.S. jobs.

Prior to the 1960s, the government was largely uninvolved in the
promotion of tourism to the United States. By the late 1960s,
however, the impact of tourism on the balance of payments and its
important contribution to economic development had become evident.

Between 1949 to 1960, the U.S. travel deficit--the difference between
the nation's payments on travel abroad and U.S. receipts from
international visitors--nearly tripled, from $360 million to $1.2
billion. In 1961, the U.S. Travel Service, predecessor to today's
U.S. Travel and Tourism Administration (USTTA), was created in
response to the growing travel deficit. Today, this situation has
reversed, and USTTA has become an aggressive promoter of U.S. tourism
interests.

However, the federal tourism promotion effort is fragmented. At
present, more than 20 federal agencies possess tourism programs in
addition to USTTA. Of these, 10 have significant responsibilities.

The Agriculture Extension Service provides communities with
information on tourism development opportunities, and is pilot-
testing "Our Town," a computerized bulletin board of rural travel
opportunities. The service also has a pilot project to increase
tourism through training, capacity building, and implementation of a
comprehensive tourism marketing plan to be developed by the New
Mexico Cooperative Extension Service. The service recently developed
instructional materials in the Polish language for use in Poland. It
has also formed an ad hoc tourism committee.

The U.S. Forest Service works with local, state, and regional tourism
organizations to create jobs in national forests, working mostly
through rural economic development efforts. A variety of other agency
activities promote tourism directly. For example, the service
recently dedicated $50,000 to support the Allegheny National Forest's
membership in the Pennsylvania-Rhode Island Regional Market
Development Program in Germany. Similar ventures are under way in
Idaho and New Mexico.

The Department of Education's College Work Study program provides a
Port Receptionist Program that offers language assistance to
international visitors at airport inspection areas.

The Bureau of Indian Affairs is involved with multi-cultural and
rural tourism and is also an ex officio member of the Rural Tourism
Development Foundation Board of Directors.

The Bureau of Land Management (BLM) manages nearly one-eighth of U.S.
lands and also is host to 2 million visitors annually. BLM
administers "Recreation 200," a recreation growth and development
plan that includes Back Country Byways, Adventures in the Past and
Watchable Wildlife. Primarily involving rural communities, BLM's
tourism policy promotes relationships with local, state, national,
and international tourism entities.

The National Park Service operates a tourism program to offer
technical assistance for the development of new tourism
infrastructure and marketing planning. Service public relations
efforts attempt to change park visitation patterns and holds tourism
training conferences concerning public use of national parks. It also
acts as a point of contact for public-private tourism organizations.

The Federal Highway Administration (FHA) administers the interim
National Scenic Byways Program, which seeks to increase tourism while
preserving the natural environment. FHA also recognizes scenic
qualities surrounding various highways, provides grants to states for
project activities along existing state-designated scenic byways, and
provides grants for other tourism-related activities. The agency has
spent about $80 million over six years for Scenic Byways Program
activities, including development of visitor centers and promotion.

The Appalachian Regional Commission works to promote travel and
tourism to the Appalachian area through promotional activities aimed
at foreign and domestic travel professionals. The commission also
provides grants for revolving loan funds as well as small grants for
educational workshops, and produces various brochures.

The Tennessee Valley Authority delivers technical assistance in the
Tennessee Valley, and cooperates with other agencies in developing
the Tennessee River for maximum economic development through tourism.
It has also been a leader in rural tourism development.

The proliferation of federal agencies involved in tourism development
has caused great concern among state and local tourism officials.
Problems cited include confusion regarding what agency to approach
for which type of support, and duplicated, uncoordinated efforts at
the state, local, and federal levels.

The severe demands of the federal budget make it imperative that the
U.S. maximize the impact of every dollar. Coordination of the
fragmented federal approach to tourism development makes sense both
in terms of maximizing the impact of federal spending and in avoiding
duplication of products and services.

In an effort to coordinate federal tourism efforts, the Tourism
Policy Council (TPC) was created by statute in 1981 to coordinate
federal policies, programs, and issues that relate to tourism,
recreation, and the national heritage. The council also is
responsible for developing areas of cooperative program activity,
assisting in the resolution of interagency program and policy
conflicts, and addressing the policy concerns of state and local
governments and the private sector.

The TPC, chaired by the Secretary of Commerce, includes the following
members: the Under Secretary for Travel and Tourism; the Director of
the Office of Management and Budget; a representative of the
International Trade Administration, designated by the Secretary of
Commerce; the Secretaries of Energy, State, Interior, Labor,
Transportation, and Agriculture; the Chair of the Tennessee Valley
Authority; the Chief, U.S. Army Corps of Engineers; the Administrator
of the Small Business Administration; the Commissioner of the
Immigration and Naturalization Service; the Chief Executive Officer
of the National Railroad Passenger Corporation (Amtrak); and the
Commissioner of Customs.

The role of TPC in tourism policy coordination has steadily eroded
over the years; at present, meetings generally are attended only by
staff-level persons with little or no authority to speak for their
agencies. This decline in TPC's effectiveness has occurred as
independent activity by agencies has increased, and the future of
tourism trade development becomes more and more significant to the
nation's economic health.

The council should be revitalized in a manner that allows for
effective cooperation and integration of federal efforts in tourism
development. This reinvention will allow the agency to achieve its
potential and fulfill the vision set out for it in the 1981 statute
and reconfirmed and expanded in the Tourism Policy and Export
Promotion Act of 1992.


Action
******

The President should broaden TPC's authority to coordinate federal
tourism promotion efforts.

TPC's expanded authority would empower the council to govern tourism
development initiatives across federal departments. The Secretary of
Commerce, as chair, should be empowered to conduct cross-cutting
tourism program and budget reviews to facilitate integrated planning
and implementation, and to propose means for improving such efforts
through resource adjustments, integrated planning, a unified budget,
or such other techniques as may be required. The council should
develop a strategy maximizing government's impact on tourism exports.

These new authorities would reverse the decline in TPC's role and
would make it an effective mechanism to facilitate interagency
communication and cooperation. TPC's efforts would be integrated with
those of the Trade Promotion Coordinating Committee. TPC would work
closely with the National Economic Council and with the Office of
Management and Budget, particularly in relationship to development of
a unified budget. TPC would prepare an annual report to the President
with recommendations on coordinating programs and allocating
resources.


Implications
************

The fragmented federal approach to assist the development of the U.S.
tourism industry has created duplication and overlap. These
recommendations would help to ensure that government spending is
being directed within a strategic framework resulting in a decrease
in duplication, better federal communication and coordination, and a
more rational expenditure of scarce federal resources.


Fiscal Impact
*************

These recommendations are budget-neutral, but their impact should
result both in increased tourism "export" earnings and increased
tourism in areas that are currently unpopular and in greater need of
economic development. Improved coordination and integrated planning
should result in a net increase in federal funds directed to tourism
promotion and, more importantly, more effective expenditure of funds.




************************************************************
DOC05: Create Public-Private Competition for the NOAA Fleet
************************************************************


Background
**********

The National Oceanic and Atmospheric Administration (NOAA) maintains
a fleet of ships to support its mission of oceanographic and
atmospheric research, assessment of living marine resources, and
nautical charting and mapping. With an average age of about 28 years,
the fleet is reaching the end of its projected life expectancy. The
life expectancy of a vessel that has received a major midlife
rehabilitation is 30 years. However, only six of 20 NOAA vessels have
had even partial midlife rehabilitation. NOAA's ability to accomplish
its responsibilities is in jeopardy unless immediate action is taken.

A recent internal NOAA study proposes that a minimum of 5,000 days-
at-sea (DAS) per year are required to accomplish its mission.(1) The
current NOAA fleet provides less than 3,600 DAS per year. This is
only 84 percent of the average annual number of DAS provided over the
past 15 years. The study also proposes a fleet replacement and
modernization plan that would cost in excess of $1.6 billion over the
next 15 years, in addition to its current funding level.

Many evaluations of NOAA's fleet requirements have been conducted
since 1986, including reports by the General Accounting Office (GAO),
the Department of Commerce Inspector General (IG), and the Oceanic
and Atmospheric Management Advisory Committee (OAMAC).(2) The OAMAC
evaluation seriously questioned NOAA's proposed ship-type
requirements, fleet size and mix of government-owned/operated,
contractor-owned/government-operated, and contractor-owned/operated
vessels. The evaluation also suggested that an independent review
would be useful in determining ship requirements and that NOAA's
proposed contracting effort be increased to a minimum of one year.
This would be necessary to generate significant private interest.
Currently, contractors provide a very small amount of NOAA's charting
and research functions.

The Corps of Engineers contracts 30 to 40 percent of its charting,
which suggests that the private sector has the ability and interest
to do this kind of work. Historically, substantial savings result
when competition is introduced into an acquisition process.

To address these issues, NOAA recently prepared a model to perform an
economic analysis of public versus private acquisition and operation
for each of its proposed acquisitions. An experiment with public-
private competition in conjunction with this new model could help
determine the appropriate size and mix of the fleet and maximize
potential savings.


Actions
*******

1. NOAA should experiment with a program of public-private
competition to help fulfill NOAA's minimum number of days-at-sea
(DAS).

The program should be conducted for a minimum of one year in each of
the three areas of mission responsibility. This experiment should be
conducted in parallel with fleet replacement and modernization and
should not delay the basic program. The results of this competition,
in conjunction with the new economic model analysis, would provide
additional support for future modernization decisions. The Request
for Proposal (RFP) would be based on desired end products rather than
on the type of equipment to be used. The RFP would also specify data
kind, quantity and quality to ensure international quality standards.
This would allow NOAA to determine areas in which private industry
has the capability and interest to provide services.


2. NOAA should bid against private contractors in areas in which the
agency can be competitive.

However, NOAA's capacity to bid will be limited in the near term,
because of the age and condition of much of its existing fleet.
Competition would give NOAA an incentive to perform its mission by
the most cost-effective methods, either in-house or by contract.
Since NOAA would be both buyer and seller, the procurement process
must be designed to prevent any conflict of interest or appearance
thereof. The process should include an impartial or independent
review to ensure that government costs and projected results are
properly prepared and all bids properly evaluated.


3. NOAA should obtain an independent review of NOAA's modernization
program.

NOAA should implement the OAMAC suggestion for an independent review
to consider specific topics relating to modernization, including the
use of generic hulls and appropriate ship staffing for NOAA's
missions. The results of this review should be factored into the
modeling process. By combining the modeling results, the competition,
and the independent review with NOAA's own internal studies, a more
informed decision can be made and justified concerning long-range
plans.


Implications
************

A core fleet of NOAA-owned ships will remain desirable. However, the
size and composition of this fleet ideally and ultimately should be
determined by the results of competition, economic modeling, and
internal analysis. Because of the poor condition of the fleet and the
long lead time needed to acquire or repair ships, however, NOAA may
need to reevaluate its plans for ship repair and replacement, to
ensure that an appropriate core capability is established as the
modernization plan progresses.

Public-private competition, in conjunction with economic analysis,
should allow the agency to make valid decisions about the size and
mix of its fleet without endangering its mission.


Fiscal Impact
*************

No change in budget authority will be required to implement these
recommenda-tions.


Endnotes
********

1. See U.S. Department of Commerce, National Oceanic and Atmospheric
Administration, NOAA Fleet Replacement and Modernization Plan
(Washington, D.C., March 1, 1991, Revised September 1, 1991).

2. See U.S. General Accounting Office (GAO), Deactivating Research
Vessels, National Oceanic and Atmospheric Administration's Use of
Private Ships, RCED-86-133 (Washington, D.C.: U.S. General Accounting
Office [GAO], June 1986); U.S. General Accounting Office, Ocean
Research Fleet: NOAA Needs to Plan for Long-Term Fleet Requirements,
RCED-90-42 (Washington, D.C.: GAO, November 1989); U.S. Department of
Commerce, Office of Inspector General, Earlier Fleet Studies were
Inadequate for Determining NOAA Mission and Fleet Needs, Report No.
STD-0200-0-0003 (Washington, D.C., August 1990); and U.S. Department
of Commerce, National Oceanic and Atmospheric Management Advisory
Committee, Second Report on the Replacement and Modern-ization Plan
by the Fleet Modernization Subcommittee for the Department of
Commerce (Washington, D.C., October 6, 1992).




*******************************************
DOC06: Improve Marine Fisheries Management
*******************************************


Background
**********

The marine fishery resources of the United States' 200-mile Exclusive
Economic Zone (EEZ) are publicly owned and privately used. The U.S.
has exclusive fishery management authority over all fish and fishery
resources within the EEZ.

The economics of traditional open-access fisheries lead to increased
competition and overcapitalization, which, in turn, lead to
accelerated depletion of fish. Harvesters in developing fisheries
initially enjoy substantial returns. As initial benefits attract more
participants and total harvests reach sustainable biological limits,
combined harvesting efforts tend to increase to prevent declines in
individual shares. To maximize net income in the face of rising costs
and reduced catches, fishermen often invest in more efficient
technology, including larger, more powerful vessels. The resulting
competition leads to increased demands at a time when available
stocks are static or declining.

Fishery managers respond to such situations by setting quotas,
regulating gear, limiting fish size, and closing areas or seasons.
However, these practices often result in even more overfishing,
harvesting inefficiency, and waste, and spur increased investment in
vessels and technology, resulting in fleet overcapitalization.(1)

Proper management techniques should produce a sustained yield of the
fishery resources over time. A 1991 National Marine Fisheries
Service's (NMFS) report indicated that of 153 edible species or
species groups, 65 (42 percent) are overused (in other words, more
resources than necessary are used to obtain the most desirable
production), 57 (37 percent) are fully used (an appropriate number of
resources result in desirable production), and 31 (21 percent) are
underused (more resources are necessary to obtain desirable
production).(2)

The Magnuson Fishery and Conservation Management Act established a
management process for the conservation and management of marine
fisheries.(3) Regional Fishery Management Councils (FMCs) have
developed 33 management plans that have been implemented by the
Secretary of Commerce. Under the act, a fishery management program
may require a permit to be obtained and fees paid for an individual,
fishing vessel, or fish processor to operate. However, the act limits
permit fees to the administrative costs of issuing the permits.
Furthermore, fees collected from permits are deposited into the
Treasury's General Fund and are not available either to reimburse the
department for its costs of issuing the permits or to fund fishery
management programs and activities. In 1990, a section was added to
provide for the establishment of a trust fund and fee assessment in
support of fishery management programs in the North Pacific.(4) This
amendment had the general support of the area's fishing industry when
it was considered by Congress.

New Zealand has implemented a management system which allocates fish
among competing users.(5) Five U.S. fisheries use a system of
individual transferable quotas (ITQs) similar to the New Zealand
plan, which combines traditional conservation regulations with free-
market methods of allocation among competing users. This method
assigns negotiable shares of the total allowable catch to
individuals, which then are transferable in free and competitive
markets. After the initial distribution of ITQs, market forces
determine individual shares of the total harvest quota.

The importance of fishery resource management cannot be
overemphasized, since jobs depend on it. Improved management and
allocation systems would help to rebuild U.S. fisheries but would
require additional resources. For example, the cost to implement a
new individual fishing quota system (a version of the ITQ) for the
North Pacific sablefish and halibut fisheries alone is estimated at
$3.1 million per year.

In light of continuing budget limitations, one option would be to
underwrite critical management, information collection, and
enforcement costs by lifting present restrictions on fees. Ideally,
users of public resources should pay the cost of managing them for
the public good. User fees are an accepted practice for recovering
management costs for land-based resources such as timber and grazing
lands.


Actions
*******

1. The National Oceanic and Atmospheric Administration (NOAA) should
continue collaborating with FMCs and commercial and recreational
fishing interests to develop and implement controlled-access plans
that include individual harvesting rights, such as ITQs, in
accordance with provisions of the Magnuson Act.

This is necessary to promote the recovery of depleted fisheries and
the industry's economic health.


2. NOAA should work with Congress, FMCs, and commercial and
recreational fishing interests to evaluate options for user fees to
help offset the cost of implementation of FMPs.


3. Depending on the outcome of these recommendations, NOAA should
prepare, in collaboration with Congress, appropriate amendments to
the Magnuson Act.


Implications
************

The need for innovative assessment and management programs and the
funds to support those programs is widely accepted. Support has been
voiced by the Marine Fisheries Advisory Committee, FMC
representatives, and members of the fishing industry. A key condition
of their acceptance is that the funds derived from the fees be used
in the fisheries from which they are collected.

Some industry members object both to limited-access programs and to
fees. In the past, this issue has prompted a wide range of protests
from the fishing industry. However, resource depletion and
overcapitalization are realities of the present management system.
Industry is beginning to understand and accept the need for a basic
restructuring of management techniques. Further discussions with
Congress, FMCs, and the fishing industry may accelerate industry
acceptance.

Programs such as ITQs would address overcapitalization by allowing
participants to match the level of capital investment with the level
of shares. As ITQs are transferred, more harvesters could move to
areas that are underused. In addition, smaller, more manageable
fleets would allow fishery managers to better control harvests and
rebuild depleted stocks. Harvesters would have greater incentives to
conserve resources and encourage others to comply with management
programs, knowing that their percentage share would result in greater
harvests as fisheries are rebuilt.


Fiscal Impact
*************

If fully implemented, controlled-access management programs would
bring economic growth and stability to the fishing industry. NOAA
estimates the potential net value derived from adjustments in fleet
size and the recovery of over-fished stocks to be $2.9 billion (a
$1.8 billion potential increase in gross harvesting revenues from all
fishery units, and a $1.1 billion reduction in harvesting costs from
increases in efficiency)--a substantial contribution to the
economy.(6)

Through the use of a combination of licenses, permits, and landing
fees, estimated revenue could exceed $100 million annually. This
number is a preliminary estimate.


Budget Authority (BA), Outlays and Revenues
(Dollars in Millions)
*******************************************
Fiscal Year
1994 1995 1996 1997 1998 1999 Total
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
BA n/a 0.0 0.0 0.0 0.0 0.0 0.0

Outlay n/a 0.0 0.0 0.0 0.0 0.0 0.0

Revenue n/a 75.0 75.0 75.0 75.0 75.0 375.0

Change
in FTEs n/a n/a n/a n/a n/a n/a n/a



Endnotes
********

1. See U.S. Department of Commerce (Commerce), National Marine
Fisheries Service, Our Living Oceans (Washington, D.C., December
1992).

2. Ibid.

3. P.L. 94-09265, as amended through November 1990, Washington, D.C.,
1976.

4. Ibid., Section 313.

5. See U.S. Department of Commerce, National Marine Fisheries
Service, Analysis of the Potential Economic Benefits for Rebuilding
U.S. Fisheries (Silver Spring, MD, April 1992).

6. See Commerce, Our Living Oceans.



************************************************
DOC07: Provide EDA Public Works Loan Guarantees
for Infrastructure Assistance
************************************************


Background
**********

Since 1965, the Economic Development Administration (EDA) of the
Department of Commerce has assisted local communities in developing
infrastructure to create and retain private-sector jobs. While
appropriations and staffing levels have dropped, EDA's main business
has remained the same. EDA's largest program in dollar terms is its
public works categorical grant program. The agency funds about 200
projects each year, such as industrial park improvements and the
construction of incubator buildings, mostly for local government
grantees, at an average of roughly $800,000 in grant funds per
project.

Depending on the level of distress in the community (measured by
factors such as low incomes and persistent unemployment), EDA pays up
to 80 percent of project costs (up to 100 percent for Indian tribes).
Yet the poorest communities often cannot finance even their 20-
percent local share. EDA's field staff reports that the usual sources
of local matching funds for essential development facilities of long-
term benefit are not available to very poor communities. Such
governments have exhausted their taxing authority and have little or
no general bonding authority, and their discretionary resources, such
as Community Development Block Grant (CBDG) funds, are committed to
other pressing needs.

Even so, more eligible projects exist than EDA can support. As a
practical matter, EDA often delays funding, either in the course of
processing or by postponing invitations for applications.
Occasionally, EDA will fund a smaller percentage of the project costs
than the percentage for which an applicant is eligible, or define
only a portion of a desired project as EDA-funded, due to its funding
limitations.

Communities and projects that do not need grant assistance could
still benefit from some lower level of financial support,
particularly for innovative projects. At a minimal cost to the
federal government, a loan guarantee program could serve as catalyst
in promoting creative and innovative projects, including the
commercialization of new technologies.

EDA's current legislation authorize public-works loans and loan
guarantees to private borrowers but does not permit loan guarantees
for public borrowers. EDA's economic revolving fund was formed to
support its loan and loan guarantee activity; it currently has a
balance of about $135 million. Repayment of old public-works loans
adds approximately $10 million per year to the fund.

EDA has not received appropriations for public-works loans since
1978. Between 1966 and 1978, EDA's Public Works Direct Loan Program
approved 421 loans for $154 million, with a more than 95-percent
repayment rate. The program was discontinued by EDA because of a
determination that sufficient funding was available through private
capital markets.


Action
******

Legislation should be enacted to establish a reserve fund for EDA
loan guarantees.

Congress should provide EDA with the authority to use a portion (20
percent) of its economic development revolving fund for loan
guarantees to financial institutions that make loans to public
entities. The guaranteed loans will be secured by general obligation
or revenue bonds (not tax-exempt) and/or the property acquired or
improved with the assistance.


Implications
************

This recommendation would improve customer service by providing EDA
with the flexibility to provide greater assistance to economically
distressed communities. Assuming a 20-percent subsidy rate, this
recommendation should enable EDA to double the amount of public works
projects it supports.

Based on the current level of funds in the revolving fund account,
about $27 million (20 percent of $135 million) would be available to
support loan guarantees of approximately $148 million, compared to
its fiscal 1993 public works program appropriation of $147 million
and its proposed 1994 appropriation of $135 million.


Fiscal Impact
*************

The cost of implementing this program is well within EDA's current
budget authority, assuming EDA reallocates its funds or requests that
funds be reprogrammed as necessary to support the contingent
liability created as a result of the loan guarantees.




******************************************************
DOC08: Establish a Manufacturing Technology Data Bank
******************************************************


Background
**********

The Department of Commerce and other federal agencies produce an
enormous amount of scientific and technical information that is
directly applicable to manufacturing. As with many federal programs,
manufacturing technology research is conducted by a wide and often
confusing array of government organizations. The National Institute
of Standards and Technology, the Department of Defense, federal
research labs, government-funded university scientists, and many
other organizations conduct basic research with a combined research
and development budget of more than $65 billion a year.

Thousands of published and unpublished documents and data files are
produced by this combined research effort. Many of these items have
direct applicability to businesses. In fact, the ability of U.S.
businesses to effectively compete in world markets or create new,
high-paying jobs is directly related to how effectively new
technologies are identified and converted to or embodied in useful
products and services.

Technological information moves freely within the research community,
but many businesses have a difficult time learning what information
is available, how it can be applied to their line of business, and
how to obtain it. This is particularly true of small businesses in
which research resources are limited. Yet maintaining a competitive
edge is vital to the long-term success of small businesses. Many
scientific and technical agencies have developed stand-alone services
to deliver information to their constituents. However, the federal
government has no ongoing and comprehensive cross-agency program to
deliver technological information to manufacturers on a continuing
basis.

The American Technology Preeminence Act of 1991 went a long way
toward centralizing the government's collection of scientific and
technical information (STI), by requiring each executive-branch
agency to transfer to the National Technical Information Service
(NTIS ) one copy of the results of all federally funded research and
development. However, no good mechanism exists to help businesses
sift through this mountain of data to locate information relevant to
their needs.

Improving manufacturers' ability to identify and obtain relevant
technical information can enable them to compete more effectively in
their current markets and to enter new markets. The success of these
efforts will enhance opportunities for U.S. workers. Well established
models can be used as blueprints for the development of a
manufacturing technology data bank (MTDB). The Commerce Department's
successful National Trade Data Bank (NTDB) has changed the way in
which the federal government delivers export promotion and
international trade information to the public and its own offices.
Moreover, an information delivery system is already well established
for these services. A MTDB based on the NTDB model could take
advantage of existing software, processing facilities, and
distribution systems. Finally, the NTDB experience shows that the
quality of reporting improves dramatically when rapid dissemination
and feedback become institutionalized.

A MTDB containing a core set of data highlighting new production
techniques, examples of best business practices, quality assurance
and management information, and contacts for additional technical
information, also could be used as a teaching tool for engineers,
business leaders, managers, product development specialists, basic
researchers, and production line workers. The NTDB again serves as a
useful model; it is used daily as a teaching tool for students in
international business and marketing courses. Exposing students to
tools used by businesses while attending colleges and universities
gives them skills that can be put to immediate use upon their entry
into the work force. Moreover, students often bring these tools to
organizations that have not yet taken advantage of these information
products.

The MTDB can be designed to compile, organize, and disseminate
information from a wide range of agencies on an equally wide range of
topics or technologies. This stands in marked contrast to existing
services that organize information along agency or topic lines
requiring extensive, often confusing, searches to research a topic or
process.

A properly prepared data bank will not be a substitute for existing
dissemination services operated by government technical agencies .
Rather, it will serve as a complementary service that exposes
individuals to basic technical concepts. When a technical area is
identified as promising, more extensive research will usually be
required to access detailed and narrowly defined databases and
services. A technology data bank will introduce a wide variety of
technology concepts to manufacturers and can serve as an "idea
generator" allowing technical issues to be examined quickly for
applicability to a business.

No one agency can accomplish this task without cooperation and
guidance from other scientific and technical agencies. One reason for
the success of the NTDB is the existence of the Interagency Trade
Data Advisory Committee (ITDAC), which is charged with advising the
Secretary of Commerce on the NTDB's content and operations. A similar
organization that focuses on STI can be established to provide
effective guidance on items to be included in the data bank,
procedures for organizing and searching for information, and
distribution channels.


Actions
*******

1. The Department of Commerce should establish a manufacturing
technology data bank.

The Department of Commerce should establish a MTDB using the
department's NTDB as an operating model. The data bank should feature
highlights of new research applicable to U.S. manufacturers,
abstracts of additional technical information available from the
federal government and the names of federal contacts in technical
areas that assist in implementing these technologies.


2. The Department of Commerce should incorporate input from an
interagency coordinating group in the data bank's development.

The Secretary of Commerce (or his designee) should chair an
interagency coordinating group to establish the content, organization
and operation of the data bank. This committee may be an extension of
an existing technical coordinating committee, such as the interagency
group comprised of the Department of Commerce, the Department of
Energy, the National Library of Medicine, the National Aeronautics
and Space Administration, and Defense Technical Information Center
(CENDI); the Federal Coordinating Committee on Science, Engineering,
and Technology (FCCSET); or a new body whose specific duty focuses on
the MTDB


3. The Department of Commerce should foster extensive use of the
manufacturing technology data bank.

The Department of Commerce should ensure that the MTDB becomes a
fundamental tool, understood by all federal agencies with programs
that assist manufacturers with new technology. The data bank should
be used by federal agencies, state and local governments, and
university and industry-based programs designed to advise firms on
how to incorporate new technology into their business.


4. The Department of Commerce should develop a comprehensive
technology dissemination program.

The Department of Commerce should administer the development of a
comprehensive technology dissemination program that employs multiple
types of electronic information media, such as CD-ROM, on-line
access, and networked distribution. The program should take advantage
of existing information networks and federal depository libraries and
offer the data bank for sale on a wholesale and retail basis.
Reasonable fees should be charged for these products.


5. The Department of Commerce should develop data bank applications
for educational use.

The Department of Commerce should encourage development of
partnership relationships with educators to ensure that technology
applications for the MTDB are developed for use in elementary and
secondary schools, colleges, universities, and trade schools; and in
adult continuing and remedial education programs. Courses, textbooks,
and multi-media applications can be developed to meet defined
teaching requirements.


Implications
************

Improved access to federal government STI will provide U.S.
businesses with enhanced opportunities to bring these technologies to
the marketplace.

Coordinated delivery of STI by federal agencies will ensure increased
use of the information by the U.S. public. Moreover, a coordinated
process for disseminating information and receiving feedback should
fuel the creation of more accurate, higher quality information in the
future.

Delivery of STI will be viewed positively by private sector
interests. All segments of the economy stand to benefit--
manufacturers, through direct application of new technology;
information service providers, through an enhanced ability to obtain
and repackage government information; and individuals, through
improved work opportunities and the creation of new jobs.


Fiscal Impact
*************

This initiative will not require additional funding.




*****************************************************
DOC09: Expand Electronic Availability of Census Data
*****************************************************


Background
**********

The Census Bureau of the Department of Commerce collects, processes,
analyzes, and distributes valuable current and historical information
on every aspect of our economy and society. Users include educators
and students; entrepreneurs; urban planners; and local, state and
federal agencies. All of these depend on the bureau to deliver
timely, accurate and low cost information relevant to their needs.
Most of these needs are met through the hard-copy publication of
2,000 to 4,000 releases and reports each year.

The bureau pioneered the dissemination of data in computer-accessible
form following the 1970 Census of Population and Housing, and was the
first federal agency to distribute statistical information on compact
disc. Expanding from a base of 10,000 computer-tape customers in
1973, the Census Bureau served 380,000 electronic-media customers in
1992; an additional 1.1 million obtained electronic census
information from subsidiary distribution partners, mostly state data
centers. Products and services now offered include diskettes,
computer tapes, CD-ROMs, a fax system, an electronic bulletin board,
automated Census Bureau exhibits at conferences of public and private
organizations, and two modest prototypes of on-line direct data
acquisition systems.

However, despite its pioneering efforts, the bureau has fallen behind
emerging information distribution standards. Faster ways to deliver
large quantities of census information to more users are needed. For
example, to order a product such as a compact disc, users either must
submit a paper order form or place the order via the bureau's
customer-service phone lines, which are only open nine hours a day,
five days a week.

Ideally, public and private data users should be able to locate and
order (or directly obtain) census information through the medium of
their choice at minimum cost, 24 hours a day and seven days a week.
On-line Census Bureau databases would allow the immediate use of data
to support ongoing research and analysis of the economy, both within
and without the federal establishment. While current data from other
agencies that measure the economy will not be affected, Census Bureau
data could assist in understanding the overall context of these
indicators.


Actions
*******

1. The Census Bureau should establish a computerized census
information access service.

Using existing technology, the Census Bureau should establish a new
24-hour computerized census information access service, and be
authorized to charge a fee to recover the costs of the service. Users
would dial a toll-free number from a touch-tone phone to access a
"free" key-word information guide to available products. Easy menu
options (much like a bank transaction system) would guide the caller
to an appropriate subsystem listing available information and order
options for particular products or services. All products and
services will involve user fees, which should continue to be based on
reproduction costs and should be automatically billable to a credit
card or to a pre-credited account for frequent users. Dispatch of
products or downloaded data sets should be fully automated.


2. The Census Bureau should publish reports electronically on the
Internet.

When hard-copy reports are printed and released to the public, they
should be simultaneously published electronically on the Internet, a
worldwide "network of computer networks" linking organizations in
North and South America, Europe, and the Pacific Basin. Internet
provides world-wide connectivity to a vast variety of federal,
military, educational, research laboratories, contractors and other
private sector organizations, researchers and practitioners.


3. The Census Bureau should publish frequently used statistics on the
Internet.

The Census Bureau should develop and publish on the Internet large
databases of frequently used statistics from censuses, surveys,
estimates, programs and international data sources. For example, the
bureau is preparing an easy to use, 6,000 variable database for every
community, county, metropolitan area, and state in the nation based
on the results of the 1990 census (DAPS90). It should be made
available on Internet. In time, geographically-correlated,
disclosure-protected summary data from the Economic, Agricultural,
and Government Censuses should be included in this file.


4. The Census Bureau should provide data from micro-records through a
dial-up system.

For sophisticated users, the Census Bureau should establish a dial-up
system containing a "disclosure-free" sample of micro-records from
frequently used censuses or surveys. Via a user-friendly software
system, the caller could "program" a desired table and download the
customized statistics to his or her desktop computer. The Bureau's
working SIPP-ON-CALL system demonstrates their ability to design,
mount, and operate such systems.


5. The Census Bureau should link these systems (particularly Internet
databases) to each of the Census Bureau's 12 regional offices. This
will provide for access by "walk-in" patrons and regional federal
personnel.


6. The Census Bureau should license these systems to state data
centers and affiliates.

The Census Bureau should license each of the 54 state data centers to
share these systems and "cascade" access to the 1,700 local data
center affiliates, including university and public libraries,
economic development departments, and councils of governments.


Implications
************

These recommendations would significantly increase access to and use
of census data, and speed up its distribution. Printed reports, which
are costly, cumbersome, and time consuming to publish and distribute,
would become less common if they were also available electronically,
thereby reducing both user and producer costs. Moreover, data that
are too extensive and expensive to tabulate and publish could be made
available electronically at lower cost. Increased access, a variety
of delivery choices, and 365-day, around-the- clock service make this
a "user-friendly" way to disseminate public information.

At the same time, these initiatives would provide a foundation for
eventual conversion to the digital transmission of data via optical
fiber, as this technology becomes more widely established. The
ultimate goal is to make it easy to obtain relevant information from
five or six reports without having to identify the reports, order
them, and wait several weeks to extract needed information.


Fiscal Impact
*************

This recommendation is budget-neutral.




***************************************************
DOC10: Amend the Omnibus Trade and Competitiveness
Act to Increase the Data Quality of the
National Trade Data Bank
***************************************************


Background
**********

The Omnibus Trade and Competitiveness Act of 1988 requires the
Secretary of Commerce to operate a National Trade Data Bank (NTDB) as
a central repository of data compiled or obtained by the federal
government relating to trade and international economics. The
Secretary delegated responsibility for developing and operating the
data bank to the Economics and Statistics Administration (ESA). ESA'
s Office of Business Analysis (OBA) has operated the service since
its inception.

The legislation requires the department to manage the data bank using
the most appropriate technology to monitor, organize, analyze, and
disseminate the data. The Act requires that "access, including
electronic access, is to be provided to virtually every citizen,
business, educational, or governmental unit in the United States."

The data bank has been successful since it began operating on August
23, 1990. It was implemented on time and under budget. The content
and quality of the NTDB has grown continuously. At its inception, the
data bank was comprised of 43 information programs contributed by 15
federal agencies. It required one compact disc (CD-ROM) per issue.
Today, the data bank is twice its original size, requiring two CD-ROM
discs per issue, and containing 100 information programs. This
includes information on import and export statistics, foreign country
market reports, how-to-export information, and foreign business
contacts.

Easy to use software allows U.S. businesses and other users to
navigate through 130,000-plus documents in the data bank to find
information they need. The data bank has revolutionized the method
used by the department's U.S. and Foreign Commercial Service to
deliver export promotion information to its U.S. field offices and
foreign-based sites.

The NTDB is in daily use in more than 800 depository libraries
located throughout the United States. More than 1,400 discs are sold
each month either through single-month sales or annual subscriptions
of 12 monthly discs.

Despite its success, though, several deficiencies limit the
effectiveness of the NTDB. Appropriations have been relatively
constant during the life of the project and are not projected to
increase. Section 5412 of the Act allows the department to recover
"reasonable fees consistent with section 552 of Title 5, United
States Code," which is part of the Freedom of Information Act (FOIA).

Consistent with these pricing guidelines, each issue is priced at $35
and annual subscriptions at $360. Cost increases have been paid
through greatly improved staff productivity. For example, the cost of
the NTDB has held constant even though it now requires two CD-ROM
discs per issue rather than one. Further innovations or improvements
can only be made as funds are found.

Experience during 32 months of continuous operation has shown that
the FOIA pricing rules, which were designed for relatively simple
search and duplication of paper files, do not fit an electronic
dissemination system involving electronic data collection, processing
and duplication. This is particularly true when the costs of
manufacturing and distributing several thousand CD-ROM discs each
month, as well as staff resources, training, and other customer-
support efforts are included.

Despite its large content, significant amounts of information remain
outside the data bank. Specifically, Department of Commerce's export
regulations represent a large omission, even though significant
efforts have been made to include these data in the NTDB. A more
comprehensive and usable system to determine a product's trade
classification (its Schedule B harmonized code) is also needed to
assist users in locating information and preparing export declaration
documents.

The NTDB, moreover, lacks sufficient data to determine true world
markets for U.S. exporters. Export and import statistics report only
bilateral trade between the U.S. and its partners. Multilateral or
world trade patterns may be determined only through use of data
compiled by international organizations such as the United Nations.
Unfortunately, most of this information is copyrighted. Dissemination
through the NTDB would require licensing fees, which cannot be
recovered due to FOIA pricing guidelines. Funding is not available to
cover these costs.

The NTDB meets the intent of Congress by bringing together important
export promotion information that can be of value to thousands of
existing and potential new exporters. Even so, it represents an
underused and little-known resource among U.S. exporters.

One reason for this is that the NTDB is poorly advertised. Experts
believe thousands of businesses and individuals would find the NTDB
useful if they knew of it. A properly funded marketing campaign
oriented to business would require additional funding, but should
yield significantly more NTDB customers. Moreover, the relatively
small investment would be well worth it if increased use of the NTDB
resulted in increased U.S. exports. At present, however, "marketing"
of the NTDB generally is conducted by word of mouth or in frequent
contacts with new exporters. Budget limitations rule out major,
comprehensive campaigns to publicize this service.

Rapidly falling technology prices and the increasing use of networked
computers present new distribution opportunities that should be used
to broaden access to the NTDB. CD-ROM distribution is still limited
to the relatively small number of computers presently equipped with
this technology. Alternative delivery techniques, such as dial-up or
network-based access, could deliver this information to much larger
numbers of customers.


Actions
*******

1. Section 5412 of the Omnibus Trade and Competitiveness Act of 1988
(P.L. No. 100-09418, 15 U.S.C. sec. 4912) should be amended by
removing reference to "fees consistent with" the Freedom of
Information Act.

This change would allow the department to establish a fee schedule
that would permit them to purchase additional data. Additional
information supported by the fee increase would greatly enhance the
data bank's usefulness for U.S. exporters and international trade
policy analysts.


2. The Department of Commerce should place the NTBD on a firm
financial foundation to ensure its continued viability.

This may be accomplished through two actions. A portion of the
revenues generated by the NTDB and related OBA electronic information
services should be earmarked for reinvestment into improvements in
the content or delivery of electronic information services or direct
customer support of these services.

Appropriations should continue or increase as necessary to maintain
adequate staff and provide the necessary infrastructure to support
these services.


3. ESA should contact international organizations (the United
Nations, the Organization for Economic Cooperation and Development,
World Bank, and International Monetary Fund) and develop an action
plan for including their data in the NTDB.

The plan should include a determination of the funds necessary to
include this information in the NTDB and the consequent impact on
user fees.


4. The Secretary of Commerce should direct all Commerce agencies to
comply with requests from ESA for data.

Missing federal information should be included in the NTDB without
delay. Additional data, where necessary, should be tabulated,
formatted, or otherwise prepared for inclusion in the data bank.


5. ESA, with the authority of the Secretary and the assistance of the
department's Office of Public Affairs and the International Trade
Administration, should take appropriate steps to develop an effective
marketing plan that publicizes the NTDB as an exporter's resource
tool to a large number of potential customers.

Strategies should include announcements by high government officials,
including the Secretary, and mass marketing via various media
strategies.


6. ESA should deliver the content of the NTDB using a full range of
up-to-date computer techniques.

Specifically, access to the NTDB via the Internet/National
Information Infrastructure should become available as soon as
possible, with dial-up service to follow.


Implications
************

Eliminating fee restrictions and increasing fees would greatly
increase the content and quality of the data bank without the need
for additional funds. New international data would literally "open
the world" to NTDB customers (mostly U.S. businesses).

U.S. businesses will be able to better research foreign markets to
determine if they want to enter or expand operations in these
markets. Improved access to world trade statistics will also improve
the analysis of trade issues by policymakers and analysts. The cost
of obtaining and disseminating this information to the public would
be largely offset by customer charges.

Adding export regulations and other trade information would improve
the content and present a more complete set of information necessary
for a business to engage in foreign trade. These data may be
accommodated in the present NTDB environment without major fiscal
impact, assuming it is provided in proper electronic format.

The Internet/National Information Infrastructure provides an
opportunity to immediately disseminate export promotion information
to a largely untapped audience--schools and universities.
Incorporation of the NTDB in programs to train students in
international marketing, business, and economics would provide
businesses with a ready supply of capable workers skilled in using
tools of international trade.

Although lifting the fee restriction would provide funds necessary to
purchase additional information, the department must be prepared for
some users declining to continue their subscriptions.


Fiscal Impact
*************

ESA should attempt to recover the additional costs needed to
implement these recommendations through increased user fees. The
department should develop a fee schedule that would permit them to
achieve the above recommendations. The department should establish a
revised fee schedule for the NTDB. The actual impact of the fee
increase cannot be estimated.


Background
**********

The Bureau of the Census, the Bureau of Economic Analysis (BEA), and
the Bureau of Labor Statistics (BLS) collect many of the nation's
most essential economic statistics. Much public sector economic
analysis and private sector business planning depends on these
statistics, which are collected through a wide variety of monthly,
quarterly, and annual surveys and quinquennial economic censuses.
Some of these surveys are mandatory; that is, response is mandated
under law. Others are voluntary. Companies of all sizes,
partnerships, and proprietorships are asked to respond. Some surveys
are sent to only a few firms; others are sent to thousands.

Inevitably, the collection of economic data by federal statistical
agencies imposes a cost on the private sector. In collaboration with
the Office of Management and Budget (OMB), these agencies attempt to
minimize this burden by simplifying surveys; eliminating outdated
surveys; avoiding duplication among surveys; using alternative
administrative records, such as Internal Revenue Service (IRS)
records; and increasing use of electronic reporting techniques. Some
costs cannot be avoided because the statistical agencies take
elaborate precautions to assure the confidentiality of data supplied
by respondents.

"Burden hours" is the measurement used to measure the private sector
costs necessary to comply with federal data collection activities.
Each hour of an employee's time to fill out a survey questionnaire
counts as one burden hour. Over fiscal years 1994-98, the business
statistics collection programs of the three federal statistical
agencies will incur about 29 million burden hours on U.S. businesses,
at an estimated total cost of $870 million. Another way to illustrate
the effort involved in collecting, tabulating, and publishing federal
business statistics is to note the costs of the federal programs. In
fiscal year 1994, the budgets for these business statistics programs,
for the three agencies combined, will total almost $266 million.

Simplifying data collection from the nation's businesses, linking
their statistical reporting schedules to their internal data-
generation schedules, instituting rolling reporting schedules to
replace "one-shot" reports such as end-of-year reports, and putting
all reporting on an electronic data interchange basis would save time
and expense for businesses and the federal statistical system alike.


Action
******

Legislative barriers to the exchange of business data among federal
statistical agencies should be eliminated.

This would enable the federal government to significantly reduce the
statistical reporting burden on American businesses. Since June 1993,
a Statistics 2000 task force, composed of representatives from the
three federal statistical agencies, has been working to develop
strategies necessary to accomplish this goal. Implementation of the
detailed proposals prepared by the task force will call for
collaboration with the IRS, including amendment of certain provisions
of law regarding the sharing of IRS data.

The program should be developed in consultation with a group selected
to represent the interests of American businesses. The end result
will be a totally new statistical reporting system for most American
companies. The program should concentrate on four immediate tasks:

--- Elimination of duplicated data requests from the three federal
statistical agencies;

--- Development of common reporting formats and simplified data
requests;

--- Development of rolling reporting schedules, timed as best as
possible to conform to businesses' internal reporting routines and to
avoid the bunching-up of data requests; and

--- Adoption of electronic data interchange standards and procedures
leading to a paperless reporting system.

Progress in these four task areas would permit exploration of a fifth
recommendation:

--- The restructuring of data collection activities to match company
record keeping practices with agency data requests; for example,
collecting selected data items for the 1997 Economic Census from
companies' division or group levels rather than from individual
operating units, and reengineering surveys so that annual surveys do
not duplicate data collected during economic census years.


Implications
************

Implementation of this program could produce several benefits. First,
it would reduce the burden hours placed on private-sector reporters.
Burden hours cost companies an estimated $30 per hour. Preliminary
analysis suggests that this program, once fully implemented, would
cut business reporting costs by around $10 million in most years and
by as much as $40 million in years when Economic Censuses occur.

More timely and accurate reporting of data from the nation's largest
companies could also be expected. An up-to-date "moving picture" of
the business performance of the nation's largest companies would be
an invaluable tool in assessing the economy's performance.

Finally, an intensified collaboration among the three federal
statistical agencies would lead to reductions in the costs of
collecting, processing, and disseminating data, better data analyses,
and improved understanding of the factors that drive performance
among the biggest firms in the U.S. economy.

Convincing industry that it would truly benefit from participating in
the system will be a challenge, but adapting federal needs to
companies' internal data procedures should encourage a favorable
response to this proposal. In the near future, the automation of
corporate data systems should reach the point at which compliance
with federal statistical reporting requirements will be viewed as
nothing more than a by-product of meeting corporations' own control
needs.


Fiscal Impact
*************

Development and implementation of the Statistics 2000 proposals will
not require additional funding.




***********************************************
DOC12: Establish a Single Civilian Operational
Environmental Polar Satellite Program
***********************************************


Background
**********

The United States is committed to an operational environmental polar
satellite program because of the critical value of the data the
satellites collect.(1) Polar satellites collect temperature and
moisture measurements (key inputs to computer weather prediction
models generating all national three- to five-day weather forecasts);
measurements of the Antarctic ozone levels; long-term environmental
measurements used to support global climate change studies; sea
surface temperature measurements; and global cloud-cover images.
Polar satellites also provide other valuable support missions, such
as monitoring emergency distress beacons to aid search and rescue
missions and worldwide data collection to support a variety of
activities, such as endangered species monitoring.

However, at present, the nation maintains two polar-orbiting
meteorological satellite systems: (l) the National Oceanic and
Atmospheric Administration (NOAA) Polar-orbiting Operational
Environmental Satellite (POES), for civil forecasting and research
purposes; and (2) the Department of Defense (DOD) Defense
Meteorological Satellite Program (DMSP) for national security
purposes.

In addition to these programs, the National Aeronautic and Space
Administration (NASA) has initiated a climate research program called
Mission to Planet Earth (MTPE). A key portion of this effort is the
Earth Observing System (EOS), a series of six different satellites
measuring various parameters critical to understanding global climate
change. One of these satellites is called the EOS-PM (PM indicating
that the satellite passes over the equator in the afternoon). The
climate monitoring instruments on EOS-PM are basically more modern
versions of the meteorological instruments currently flying on the
NOAA weather satellites. In essence, the nation will have three
different satellite systems with very similar capabilities.

Over the past 20 years, the POES and DMSP programs have made numerous
attempts to converge to the greatest extent possible.(2) The programs
have similar spacecraft, use a common launch vehicle, share products
derived from the data, provide complementary environmental data to
the nation, and work closely together on research and development
efforts. In all, the programs achieved substantial commonality, but
national security concerns have precluded full convergence.(3)

DOD has stated it would manage a converged system, but a single
program run by DOD was and still is unacceptable given international
concern over the militarization of space.(4) Today, however, with the
end of the Cold War, the issues which have precluded complete
convergence seem to have diminished in importance.(5) With both
programs planning a new satellite design, the time is appropriate to
consolidate their efforts.

The EOS-PM climate research satellite is being designed with the idea
that many of the instruments can be used by NOAA within the POES
program. This continues a historical NOAA-NASA relationship wherein
NASA develops new technology and demonstrates prototype hardware, and
NOAA buys identical units for continued operational support.(6)
However, current plans involve flying EOS-PM for 15 years, during
which time POES also will have operational satellites.(7) Over most
of this period, both programs would be flying duplicate instruments.
The nation would be more efficiently served if NASA would develop and
fly the prototypes once and then transfer the systems to NOAA's
operational program for future flights.

Convergence studies began in 1972 and have continued ever since.(8)
NOAA recently performed an internal study of the opportunities
available through convergence of the programs.(9) Recently, initial
talks have begun among the three agencies with the goal of performing
another study of convergence opportunities among the three
programs.(10) What is needed, however, is a clear decision to create
a single, civilian polar satellite program.

Currently, the NOAA POES program, the DOD DMSP program, and the NASA
EOS-PM program all are in various stages of developing new spacecraft
and instruments. In the next 10 years, the estimated total cost for
these three efforts exceeds $6 billion in development, production,
and operations costs. However, many policy makers feel that the
nation cannot afford to develop three separate satellite systems with
such similar missions.

For example, Congressman George Brown of California has stated that a
converged system seems more achievable than in the past. He therefore
has directed NOAA to work with DOD and NASA to "jointly study and
assess the possible benefits and mechanisms for merging all or parts
of the three programs." (11) Senator James Exon of Nebraska was more
direct in his letters to DOD and Commerce: "The nation cannot afford
to maintain and modernize two satellite weather constellations." (12)
Recently, at the National Space Outlook Conference, Air Force General
Charles Horner, Commander United States Space Command, stated: "How
you do convergence is really the question, not if you do
convergence." (13)

A single operational polar satellite program could meet the needs of
all users by incorporating key DOD requirements into the NOAA POES
program. Furthermore, the synergy achieved through DOD and NOAA
cooperation could allow both agencies to meet critical operational
requirements (such as collecting oceanographic and global
tropospheric wind data) which neither agency has been able to afford
alone. The converged operational program could save additional costs
by using the NASA EOS program's state-of-the-art spacecraft and
instruments instead of forcing NOAA to design and build its own. The
result would be a single development program (compared to the three
planned today) and minimal overlap between NASA's climate research
and the NOAA-DOD converged operational meteorological missions.

The difficulty will be to successfully incorporate DOD requirements
into the program. Based upon historical studies, key areas requiring
consideration are data deniability, orbit selection, international
cooperation, and adequate oversight to ensure DOD concerns are
adequately met.(14) The following summarizes how each of these can be
addressed:

Data deniability. The satellite must broadcast data free to everyone
but also have the capability to deny data to specific adversaries.
New technology, such as that used to deny cable-TV pay channels to
non-subscribers, makes this task easier.

Orbit selection. Currently, the DOD desires the capability to change
its satellite orbits depending on mission requirements. Past studies
have identified a three-satellite constellation as sufficient for
meeting all orbit needs.(15) Allowing DOD to influence orbits
selection should alleviate their concerns.

International cooperation. A NOAA-led system could easily maintain
and even improve international cooperation in environmental data
exchange. However, since NOAA plans to use foreign satellites as part
of the converged program, DOD may be reluctant to rely upon foreign
satellites for important data. This concern could be alleviated by
maintaining one or more ground spare U.S. satellites at all times
that could be launched if a foreign-controlled satellite ever became
unreliable.

Oversight. DOD will require some mechanisms to ensure their
requirements continue to be met. Possible implementation details
could involve including DOD user and acquisition experts in the NOAA
program offices and operations facilities, allowing DOD to fund and
manage DOD-unique parts of the program, and establishing an
interagency oversight group to which the program would have to report
periodically to ensure that all agency requirements were adequately
met. Such oversight mechanisms should not be difficult to achieve.
The driving force behind this effort is clearly the desire to reduce
costs.

Further cost reduction could be achieved through greater
international participation. According to Dr. Ray A. Williamson of
the Office of Technology Assessment: "Greater international
coordination and collaboration on sensors and systems . . . will
eventually be needed in order to reap the greatest benefit from the
world-wide investment in remote sensing." (16)

NOAA is already working on such arrangements in its POES program by
asking the Europeans to assume a greater role. An agreement in
principle has been reached between NOAA and the European Organization
for the Exploitation of Meteorological Satellites (EUMETSAT) whereby
EUMETSAT will purchase, launch, and operate one of the two current
POES missions beginning in the year 2000. This will save the U.S.
more than $100 million for each launch of one of these satellites.
Such cooperation with the Europeans is an important component of
cost-efficient operations and is the first step to a truly
international environmental satellite observing system.


Action
******

Legislation should be enacted to establish a single environmental
polar satellite program under the direction of NOAA.

Congress should enact legislation to establish a single environmental
polar satellite under the direction of NOAA. The legislation should
direct NOAA, NASA, and DOD to undertake activities to establish this
effort within their existing programs.


Implications
************

The proposed changes would allow for a more efficient, less-costly
global satellite observation program. A strong, efficient U.S. polar
environmental monitoring program would be the foundation for a
cooperative international system. The Europeans already plan to
increase funding for an element of this system. With a solid, unified
U.S. national program in place, other countries may align their
programs to complement the basic system. The result will be
additional environmental data collected at minimal cost to the
nation. The convergence concept provides a feasible and cost-
effective opportunity to accurately monitor and predict the impact of
the environment on the world's societies.

The greatest difficulty in the proposal will be to ensure that a
single, national program under civilian leadership will be responsive
to national security needs. However, these concerns can be met much
more easily now than they could have in the past.


Fiscal Impact
*************

Cost savings over ten years would total about $l.3 billion. This is
based on a three-staellite system (with European participation)
relying on NASA to develop new hardware.

Budget Authority (BA) and Outlays (Dollars in Millions)
*******************************************************

Fiscal Year
1994 1995 1996 1997 1998 1999 Total
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
BA 0.0 0.0 -75.0 -75.0 -75.0 -75.0 -300.0

Outlays 0.0 0.0 -50.0 -70.0 -75.0 -75.0 -270.0

Change
in FTEs 0 0 0 0 0 0 0



Endnotes
********

1. See Hussey, John W., "Economic Benefits of Operational
Environmental Satellites," reprinted from A. Schnap (ed.), Monitoring
Earth's Ocean, Land, and Atmosphere from Space-Sensors, Systems, and
Applications, Vol. 97 of Progress in Astronautics series (Washington,
D.C.: American Institute of Astronautics and Aeronautics, 1985).

2. See Blersch, Donald, DMSP/POES Convergence Materials Handbook,
STDN-91-18. 2nd ed. (Arlington, VA: Analytic Services Inc., October
1991).

3. See U.S. Department of Commerce, Comparison of the Defense
Meteorological Satellite Program (DMSP) and the NOAA Polar-orbiting
Operational Environmental Satellite (POES) Program, Envirosat-2000
Report (Washington, D.C., October 1985).

4. See U.S. Department of Commerce, National Oceanic and Atmospheric
Administration (NOAA), International Implications of Converging the
DOD and DOD Polar Orbiting Meteorological Satellite Systems
(Washington, D.C., 1987).

5. See Blersch, Donald, DMSP/POES Convergence: A Post Cold War
Assessment (A Re-Examination of Traditional Concerns in a Changing
Environment) (Arlington, VA: Analytic Services, Inc., June 1993).

6. See U.S. Department of Commerce and National Aeronautic and Space
Administration, "Basic Agreement between U.S. Department of Commerce
and the National Aeronautics and Astronautics Association Concerning
Operational Environmental Satellite Systems of the Department of
Commerce," 1973.

7. See National Aeronautics and Space Administration. 1993 Earth
Observing System Reference Handbook (Washington, D.C., March 1993).

8. See Blersch, DMSP/POES Convergence Materials Handbook.

9. See U.S. Department of Commerce, "Report of the Working Group on
NOAA Polar Satellite Convergence Opportunities," (Washington, D.C.,
June 1993). (Draft.)

10. See U.S. Department of Commerce, National Oceanic and Atmospheric
Administration, National Aeronautical and Space Administration,
"Terms of Reference for Joint Defense Meteorological Satellite
Program (DMSP), Polar-orbiting Operational Environmental Satellite
(POE S) and Earth Observing System (EOS) Program Assessment," June
29, 1993.

11. See Letter from George E. Brown, Jr., Chairman of the House
Committee on Science, Space and Technology, to Dr. D. James Baker,
NOAA Administrator, February 22, 1993.

12. See Letters from Senator James Exon to Secretary of Commerce
Ron Brown and Deputy Secretary of Defense William Perry, June 2,
1993.

13. "Horner Supports Converged System," Space News (June 27,
1993), p. 4.

14. Blersch, DMSP/POES Convergence Handbook, p. II-2.

15. See U.S. General Accounting Office, Economies Available to
Converging Government Meteorological Satellites (Washington, D.C.:
U.S. General Accounting Office, 1986).

16. U.S. Congress, House Committee on Science, Space and
Technology, Subcommittee on Space, testimony by Dr. Ray A.
Williamson, Office of Technology Assessment, May 6, 1993.




*****************************************
DOC13: Use Sampling to Minimize the Cost
of the Decennial Census
*****************************************


Background
**********

The decennial census of population and housing is one of the federal
government's largest and most expensive statistical programs. The
full cycle cost of the 1990 census program (fiscal year 1984 through
fiscal year 1993) will total nearly $2.6 billion.

The results of the 1990 decennial census indicate that the current
approach appears to have exhausted its potential for accurately
counting the population at a reasonable cost. The Census Bureau's
Year 2000 research and development staff has estimated that, if the
current approach to the census is retained in the year 2000, the
costs could rise to about $4.8 billion in current dollars. Moreover,
the average cost per household (measured in 1980 dollars) has
steadily increased, from $5.04 in 1950 to $12.10 in 1980 to $17.00 in
1990.

In 1990, accuracy fell below that of the 1980 census, while census
costs escalated significantly. Between 1940 and 1980, the broad
overall measure of census accuracy--the net undercount (the
percentage of the population not counted) declined each census.
However, the official estimate of the net undercount rose to 1.8
percent (4.7 million persons) in 1990, from 1.2 percent in 1980.

The Census Bureau's longstanding policy of attempting to gather data
on each nonresponding household (more than 34 million in 1990) has
resulted in a reliance on labor-intensive and time-consuming field
operations (such as door-to-door canvassing). Such efforts are
costly, both in terms of the $1.3 billion spent for census data
collection and in the quality of the data collected. The costs of
these efforts continue to rise in direct relationship to the
declining response rate to census mail questionnaires, which fell by
10 percentage points in 1990 to 65 percent. In addition, it is
estimated that the error rate increases significantly for follow-up
efforts on nonresponding households, as compared to persons counted
primarily by mail return of questionnaires. The Census Bureau
estimates that it could have saved $450 million if it had sampled 25
percent of the nonresponding households in 1990 rather than
attempting to collect data on all of them.

The Census Bureau, however, is unable to use sampling to supplement
its current enumeration-based method, due to the current statutory
prohibition on the use of sampling in determining the census for the
apportionment of Congress.

Research by Census Bureau staff suggests that a number of factors,
such as illiteracy, rising numbers of non-English speaking immigrants
and concerns about privacy, may make the environment for census-
taking even worse over the next decade. It is generally agreed that
the current census methodology does not and cannot count the entire
population, and that the challenges will continue to mount. As a
result, the census undercount is likely to increase; costs will rise
and the accuracy of the census will decrease.

Sampling nonrespondents to support the enumeration-based method
offers the opportunity to improve accuracy, reduce the undercount,
and lower the cost of the census.


Actions
*******

1. Title 13, Section 195, of the U.S. Code should be amended to
remove the current prohibition on the use of sampling in the census
to determine the apportionment of Congress.

Title 13, Section 195, of the U.S. Code should be amended to remove
the current prohibition on the use of sampling in the census to
determine the apportionment of Congress and authorize the Director of
the Census Bureau to use sampling of nonrespondents to supplement the
current enumeration-based method. While questions have been raised
about the legality of sampling for the census count, according to
Census Bureau officials, available legal opinions and case law do not
appear to prevent the use of sample-based methods to supplement
enumeration-based methods. However, congressional action must take
place before the end of 1995 to allow the Census Bureau to make final
design recommendations.


2. The Census Bureau should begin planning for statistical sampling
of nonrespondent households.

The bureau should begin planning and developing a methodology to use
statistical sampling of households that fail to respond to the mail-
out census form for the 2000 census, rather than attempting to locate
and count every individual.


Implications
************

Sampling nonrespondents would add sampling error to the census
results. The key technical question is whether non-sampling errors
can be reduced enough to offset the sampling error. For example, if
the reduced workload resulting from sampling would lead to fewer
errors, the total accuracy of the result may be better. The key
policy issue to be addressed is whether various stakeholders--
Congress, the states, localities, and businesses--are willing to
accept census counts that are based in part on a sample.


Fiscal Impact
*************

The potential savings from the use of sampling can be approximated
through the use of the Bureau of Census' cost model. For example, in
1992 dollars, it is estimated that approximately $300 million would
have been saved with a 50-percent sample of the nonresponse follow-up
workload in 1990. With a 25-percent sample, approximately $450
million could have been saved while maintaining the full complement
of district offices; $650 million would have been saved with a
reduced number of district offices.

Budget Authority (BA) and Outlays (Dollars in Millions)
Fiscal Year
*******************************************************

1994-99 2000 (1 in 2 Sample) 2000 (1 in 4 Sample)
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
BA 0.0 -300.0 -650.0

Outlay 0.0 -270.0 -585.0

Change
in FTEs 0 -13,000 -26,000





*************************************************
DOC14: Build a Business and Economic Information
Node for the Information Highway
*************************************************


Background
**********

The Department of Commerce is an acknowledged leader in the
dissemination of business and economic information through computer
and telecommunication technology. The Economics and Statistics
Administration (ESA) has been an outstanding innovator in the field.
The Census Bureau began distributing its data on computer tape in the
1960 Census and moved to CD-ROMs for the 1990 Census. The Bureau of
Economic Analysis distributed its national economic account data on
diskette in the early days of micro-computers. The Office of Business
Analysis pioneered on-line dissemination of economic data with the
Economic Bulletin Board, (EBB) and has greatly facilitated the
department's export promotion function with the National Trade Data
Bank on CD-ROM.

ESA electronic dissemination products now go directly to almost
400,000 individuals and organizations; through "multipliers"
(information vendors, state and local government agencies, and
educational institutions), ESA data reach as many as one million
individuals and businesses in the U.S. Even so, many millions of
individuals, businesses, and other organizations do not have access
to basic information that would help them in their daily affairs and
which would increase their understanding of choices open to them.

New developments in computer technology and emerging
telecommunications technologies present the department with a
significant opportunity to expand the availability of its data
services to businesses and individuals at limited costs.


Actions
*******

1. The Department of Commerce should build a business and economic
information node for the information superhighway.

ESA has already established an Internet (a global network of more
than a million computers, spanning seven continents, with up to 20
million users) node for the EBB and is now proceeding to test that
system with the Federal Depository Library system. The EBB should be
extended to a full-scale economic and business information source.


2. Commerce should establish common formats and protocols for data
transfer and standards for data description for use within the
department and for extension to the entire federal government
information community.

Precedent for this exists in the standards established for the EBB;
the National Trade Data Bank, and the National Economic, Social, and
Environmental Data Bank. Forty-one federal agencies already
contribute to these products and use these standards. It is essential
that business and economic information from the entire federal
government be accessible in a unified way.


3. Commerce should establish a prototype "on-line" business and
economic information system in the White House (National Economic
Council) to develop the concept, refine its data and communications
standards, and create a state-of-the-art search and retrieval and
analytical system.

Later, dissemination techniques developed in the Internet test system
can be combined with the most useful techniques of the White House
system to create a first-rate business and economic information
system for the National Information Infrastructure.


Implications
************

These recommendations could bring the federal government
significantly closer to connecting every citizen and U.S. business to
the government through easy, low cost, direct access to information.
At the end of these projects, government business and economics
information would be directly available to 10 to 20 million citizens
through Internet alone, and to millions more through secondary
sources.

On the negative side is the clear challenge these moves would present
to the private information industry. In the past, these firms have
vigorously protested any move by the government to make information
directly available to the public and have adamantly protested "value-
added" information products.


Fiscal Impact
*************

This initiative will not require additional funding.




***********************************************************
DOC15: Increase Access to Capital for Minority Businesses
***********************************************************


Background
**********

While the efforts of the federal government and Congress have helped
to mitigate the effects of the historic exclusion of minority
businesses from the competitive marketplace, minorities continue to
experience obstacles to full participation in the free-enterprise
system. The most recent statistics from the U.S. Census Bureau
indicate that while minorities comprise 19.7 percent of the
population, they own 8.9 percent of American businesses. These
businesses account for only 3.9 percent of the nation's gross
business receipts and generate less than 3 percent of the employment
produced annually--figures that have changed very little over the
past 20 years .

A recent report of the U.S. Commission on Minority Business
Development determined that a lack of access to capital was one of
the most formidable stumbling blocks to the formation and development
of minority businesses. There is a long history of minority
businesses' inability to gain access to capital and credit that, in
part, accounts for the low entry rate of minorities into business and
that has a direct impact on unemployment rates and other social
problems. In addition, many minority businesses which start out under
capitalized find it almost impossible to obtain capital or credit to
expand their operations.

Many believe that the Community Reinvestment Act (CRA), enacted more
than 15 years ago to overcome barriers to credit and capital in
economically disadvantaged communities, has failed. The CRA's impact
has been limited due to an overemphasis on process, documentation,
and good intentions rather than actual lending to or investments in
low- and moderate- income neighborhoods and distressed rural
communities.

In addition to intrinsic barriers to obtaining capital and credit,
minorities are also adversely impacted by the overall decline in
lending to all small businesses because of economic conditions, bank
regulatory requirements and tighter credit standards by lending
institutions.

The President has made it a major priority of his administration to
address the problem of lack of access to credit for small- and
medium-sized businesses and improve the effectiveness of the CRA. To
support the President's efforts and to address the specific concerns
of minority small businesses, the Secretary of Commerce and the
Administrator of the Small Business Administration (SBA) have
established a working group to develop recommendations for improving
federal assistance to minority businesses, with particular emphasis
on access to capital and credit.


Actions
*******

1. The Secretary of Commerce and the Administrator of SBA, upon
completing their review of the various federal minority business
assistance programs (with particular attention on the SBA section
8(a) program and the programs of the Minority Business Development
Agency) should make recommendations to the President for improving
federal assistance to minority-owned small businesses.

These recommendations should be made within 90 days of completing
their report.


2. The Secretary of Commerce should determine the feasibility of
allocating a portion of Commerce's budget to provide assistance to
state and non-profit organizations that provide innovative and
alternative sources of credit and capital to minority-owned
businesses.


3. The Secretary of Commerce should expand the capacity of the
Minority Business Development Agency to identify and develop private
and public sources of capital for minority small businesses.


4. The Secretary of Commerce should provide the President with
recommendations to improve and strengthen the Community Reinvestment
Act by November 1, 1994.


Implications
************

Improving federal assistance to minority businesses will contribute
to the growth of the economy. Establishment of effective programs to
promote the ability of minority business enterprises to participate
in the competitive market is an important element in the planning and
implementation of strategies to reduce unemployment and other
economic and social problems in minority communities.

Coordination of the two major federal minority assistance programs
will more effectively address the practical problems that hinder the
development of minority businesses.

Development of a national strategy to provide capital and credit to
minority businesses will improve the rate of entry of minorities into
business and increase the chances for success for minority businesses
in general.


Fiscal Impact
*************

All of these recommendations can be implemented within the present
budget authority.




*****************************
Agency Reinvention Activities
*****************************


Summary
*******

Fhe Department of Commerce has been in partnership with U.S. business
for 80 years, seeking to maintain a prosperous, productive America.
Over the past decade or so, however, the department slid from being
an advocate of economic prosperity to a bystander. As the national
and world economies changed, the department too often continued to
rely on its traditional ways of doing business.

The President and Secretary Brown believe the time has come for
change. The fiercely competitive world economy, environmental threats
and headlong technological change demand that the department re-
examine its basic policies, programs, and operations.

Under the Secretary's leadership, Commerce has begun that process to
redefine the role it plays in the country's economic and
environmental future; to realize the Secretary's determination to
make Commerce a government leader; and to spread through the ranks of
Commerce employees an optimism about the impact the agency can have
and a commitment to a pragmatic, bottom-line approach. The Commerce
Performance Review (CPR) has been the vehicle to launch the
department in that direction.

The Commerce approach is somewhat different from that of other
agencies because of Secretary Brown's profound conviction that
tapping the knowledge of employees will yield an abundance of
improvement ideas. Events have borne him out. Nearly 8,000 ideas have
flooded in from employees across the country and around the world.

Change is the goal and this outpouring of help set the stage for
change at every level. Few areas of the department will remain
untouched as it proceeds to implement these ideas. They range from
proposals to redirect legislation, to improvements in financial
management, to methods of streamlining correspondence processing.
Commerce will pursue every idea, regardless of whether it will save
millions or merely make one person's job more satisfying.

The department's review structure is designed to reflect both the
department's central policy themes and its diverse program
priorities. Its key elements are summarized below.

--- An Executive Committee, consisting of the Secretary and his top
staff, which is responsible for final review and approval of all
ideas and for systematic review of implementation efforts;

--- A Steering Committee (Assistant Deputy Secretary; Acting Chief
Financial Officer and Assistant Secretary for Administration;
Director for Budget, Planning, and Organization; Director for Human
Resources Management; and Confidential Assistant to the Deputy
Assistant Secretary which is responsible for day-to-day coordination
of the idea-generation effort, oversight and assistance to working
teams and cross-cutting teams, compilation of idea books for the
Executive Committee, and design of the implementation effort.

--- A bureau leader who is responsible for the success of this
project within his or her bureau, including the introduction of the
idea generation process to employees, process monitoring and
evaluation and ranking of ideas.


Specific Reinvention Projects
*****************************

This report summarizes the results of the massive idea-generation
process, but also describes a variety of other approaches pursued in
parallel. The department painstakingly re-examined its mission and
program priorities. Commerce launched a major customer outreach
initiative, convened hundreds of managers into focus groups to share
their expertise on a range of more than 20 topic areas, examined the
needs and opinions of its customers, and carried out five major
cross-cutting studies led by members of the Secretary's top staff.

The department expects that it will save significant amounts of money
through this process, and is convinced that it will do a better job
of delivering products and services to its customers. Ultimately,
there can be no more important goal than excellence, and the
department plans to achieve that goal, based on the expectations of
its customers and clients.

The CPR initiative consists of four main components--idea generation,
cross-cutting teams, focus groups, and reinvention labs.


The Idea Generation Process
***************************

Secretary Brown wanted to be sure every employee had opportunities to
submit ideas. He launched this initiative with a May 19 letter to all
employees asking for their support and ideas. After that, a variety
of means were used to get the word out and seek ideas: a special
electronic mail box for employees, a memo to all field employees from
the directors of the Kansas City and Boulder Administrative Support
Centers, a special departmental kick-off meeting in the auditorium,
and a series of bureau-sponsored kick-offs.

The response was encouraging; nearly 8,000 employee ideas arrived
from throughout the country and around the world. The ideas were
predominantly "high-payoff" ones.

The Secretary's belief in the expertise and innovative spirit of
employees is well-founded. The number of ideas received, their
quality and creativity, and the obvious effort that went into them
are ample evidence of the commitment of the Commerce work force to
making the department a better and more effective place to work.

The review process was intensive. Every idea was reviewed and
evaluated by a bureau head, who was usually assisted by a team of
employees, and then submitted for departmental review, first by the
CPR Steering Committee and then by the CPR Executive Committee, which
includes the Secretary. The Steering Committee then met with each
bureau head and agreed upon follow-up implementation.

In the meantime, Secretary Brown directed that implementation begin
immediately. A number of important steps already have been taken .
For example, the following internal procedures have been streamlined
or eliminated:

--- The requirement for approval of travel by multiple persons to the
same destination has been delegated to bureau heads.

--- The "counterpart clearance" process for personnel clearance has
been eliminated.

--- The threshold for grants clearance has been raised to $100,000.

--- The threshold for clearance of advisory and assistance services
contracts has been raised to $100,000.

--- The threshold for BankCard purchases has been raised.

The department also selected priority ideas that will be fully
researched and prepared as action documents. While some ultimately
may not be implemented because of cost or other factors, all offer
considerable potential for improving service delivery. Examples of
topics being pursued include:

--- expanding the availability and improving the quality of economic
data on the newly independent states of the former U.S.S.R. and
Eastern Europe;

--- developing options for an annual forum on governmentwide
technology transfer as a means of enhancing commercialization by the
private sector;

--- automating standard governmentwide and Commerce forms to reduce
printing and labor costs;

--- exploring methods to improve the department's effectiveness in
handling fisheries collection cases in state and federal courts;

--- proposing the establishment of a threshold of public burden hours
for the Office of Management and Budget (OMB)'s approval of public
information collections; and

--- examining the costs and benefits of automated fee collection for
the public use of patent and trademark search systems.

To supplement the internal idea generation process, the department
will also seek the input of its customers. A preliminary customer
survey (approved on an expedited basis by OMB) was used by five
bureaus to provide information to support management improvements.
The department is now working with the Bureau of the Census to
develop a comprehensive customer survey methodology that will
incorporate a combination of written surveys and interviews. This
initiative will be part of the continuing effort to reinvent
Commerce.


Cross-Cutting Teams
*******************

Shortly after the idea generation effort began, six cross-cutting
programmatic teams were formed. Each was led by a bureau head and
included members from throughout the department. They were selected
because of their reputation for achievement and innovation. The teams
examined broad functional areas, deliberately not confining
themselves to traditional organizational boundaries, and developed a
wide range of recommendations for the Secretary's approval. Their
reports, just completed as this summary was prepared, include 35
proposals for action, including:

--- Establishing a one-stop source for computer access to government
data on business, economics, international trade, and demographics;

--- Developing a coordinated intra-departmental program to inform
industry of the need for ISO 9000 quality system standards
registration and to educate them on its importance for global
competitiveness;

--- Launching an initiative to have the department serve as focal
point for U.S. firms to promote trade in oil and hazardous chemical
spill response products, building on the department's own experience
in this area;

--- Designing and implementing a prototype technology data bank,
using CD-ROM technology, to offer U.S. manufacturers research
reports, abstracts, and other data on new technology; and

--- Establishing sustainable development as a unifying policy for
Commerce programs, reflecting the administration's rejection of the
false choice of economic development or environmental protection.

These few examples serve to illustrate the breadth of ideas that have
been advanced under this initiative. Commerce expects significant
benefits to the public from better service delivery to result.


Focus Group Sessions
********************

A source of getting new ideas is through a series of focus group
sessions which brought together managers from different parts of the
department in small, facilitated groups to generate and discuss ideas
for improvement. The meetings were organized around specific themes,
including five programmatic and seven administrative management
topics.

More than 400 employees, located both in Washington, D.C. and in the
field, were asked to participate. Thirty focus group meetings were
held, including 21 in the Washington, D.C. area and nine in five
different field locations. The field sessions were held in Boulder
and Denver, Colorado; Miami, Florida; Kansas City, Missouri; and
Seattle, Washington.

In general, headquarters participants tended to be concerned with the
policy directions the department will take and how "reinventing"
concepts will be used to facilitate change. Field managers, in
contrast, tended to be more interested in administrative and
management themes and, particularly, in increasing their authority
through greater delegation. Specific proposals include the following
examples:

--- Improving government's ability to work productively with U.S.
standards-setting bodies to represent U.S. interests in the
international arena;

--- Bringing together community-based field offices to work
cooperatively on assistance programs;

--- Requiring value-added and cost-benefit analyses of all new or
revised administrative processes, procedures, and rules;

--- Simplifying security classification procedures by removing excess
layers of clearance and relaxing the "aggregate classification" rule;
and

--- Analyzing the extent to which new technologies are moving
overseas and why.

These five ideas illustrate the range of nearly 100 specific
proposals that emerged from the focus-group sessions, all of which
are now under review for implementation.


Reinvention Laboratories
************************

The fourth avenue for "reinventing" the department is the reinvention
laboratory. This technique will enable Commerce to experiment with a
variety of approaches to improving program performance. Five
reinvention laboratories have been approved to date:

The National Technical Information Service (NTIS) will experiment
with means to provide one-stop, electronic service for business. Key
components will be "FedWorld," a pilot gateway to federal agency
electronic bulletin boards, the comprehensive existing NTIS document
collection, and electronic on-line dissemination techniques.

The Bureau of the Census intends to reengineer the full census
process using computer-assisted technologies. This approach reflects
the move from traditional paper and pencil data collection to fully
automated approaches.

The Patent and Trademark Office (PTO) plans to experiment with a plan
to allow employees to "telecommute" by performing a substantial
portion of their duties at another work site, typically their homes.
The experiment will build upon recent PTO advances in automated
technology.

The Bureau of Export Administration plans to deal creatively with its
budget-driven downsizing by creating a more flexible, performance-
driven organization, reducing costs without recourse to reductions in
force.

The department's Boulder, Colorado facility houses scientific
laboratories from three bureaus. The reinvention laboratory there
will experiment with ways to achieve more efficient operations by
examining delegation of authority, service responsiveness, and other
support-service mechanisms.


Lessons Learned
***************

One of the most important lessons learned was that an effort to get
ideas for improvement must have the clear support of top management
to assure employees of the sincerity of the effort. Secretary Brown's
commitment to this process was evident to all, from top program
managers to part-time summer clerks. Connected to that principle is
the necessity to provide adequate resources to manage the initiative
and seek ideas through multiple channels.

A second lesson is the necessity for an intensive follow-up. Commerce
recognized that gathering and evaluating ideas was merely the
beginning of the reinvention effort; ensuring that ideas are acted
upon and employees and clients are informed of the results is the
real challenge. Commerce will retain its present project structure
throughout implementation, with supplemental staff to conduct careful
monitoring.

In addition, Commerce believes that the involvement of field-office
management and employees is critical to achieving the department's
reinvention goals. In Commerce's case, nearly half of its staff is
located outside the Washington, D.C. metropolitan area, and their
perspective provided an invaluable means of reexamining our
operations. As was confirmed by the focus group sessions and the
ideas provided by employees, field staff tend to have a different
slant on priorities and problems and are more concerned with
operational issues.


Conclusion
**********

The Department of Commerce has taken an ambitious approach to its
reinvention effort. Its Commerce Performance Review has tapped the
ideas of managers, employees, and customers. The full impact of the
effort is not likely to be known for some time, as changes are
implemented and benefits verified. But Commerce is working with a
vast array of ammunition--nearly 8,000 ideas from employees, 100
recommendations from focus groups, and 30 detailed proposals from
cross-cutting teams. Potential savings are significant, but these
must be carefully researched. Credibility is critical to the
continued success of this initiative, and the department must be sure
that the results it expects will in fact occur.

That principle applies to the less tangible, but equally important,
improvements expected in customer service and product quality. That
is the ultimate test of this effort and Secretary Brown is determined
that the Department of Commerce not just meet but exceed expectations
in this area.




************************
Summary of Fiscal Impact
************************

Change in Budget Authority by Fiscal Year (Dollars in Millions)
**************************************************************
Recommendation
1994 1995 1996 1997 1998 1999 Total Change
in FTEs
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
DOC01: n/a n/a n/a n/a n/a n/a n/a n/a

DOC02: n/a n/a n/a n/a n/a n/a n/a n/a

DOC03: n/a n/a n/a n/a n/a n/a n/a n/a

DOC04: n/a n/a n/a n/a n/a n/a n/a n/a

DOC05: cbe cbe cbe cbe cbe cbe cbe cbe

DOC06: n/a 0.0 0.0 0.0 0.0 0.0 0.0 n/a

DOC07: n/a n/a n/a n/a n/a n/a n/a n/a

DOC08: n/a n/a n/a n/a n/a n/a n/a n/a

DOC09: n/a n/a n/a n/a n/a n/a n/a n/a

DOC10: n/a n/a n/a n/a n/a n/a n/a n/a

DOC11: n/a n/a n/a n/a n/a n/a n/a n/a

DOC12*: n/a n/a -75.0 -75.0 -75.0 -75.0 -300.0 0

DOC13**: cbe cbe cbe cbe cbe cbe cbe cbe

DOC14: cbe cbe cbe cbe cbe cbe cbe cbe

DOC15: n/a n/a n/a n/a n/a n/a n/a n/a
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Total n/a 0.0 -75.0 -75.0 -75.0 -75.0 -300.0 0

* Savings result from other agency programs

** Savings are achieved in the year 2000

cbe = Cannot be estimated (due to data limitations or uncertainties
about implementation timelines).

n/a = Not applicable (recommendation improves efficiency or redirects
resources but does not directly reduce budget authority).




Change in Outlays by Fiscal Year (Dollars in Millions)
******************************************************

Recommendation
1994 1995 1996 1997 1998 1999 Total
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
DOC01: n/a n/a n/a n/a n/a n/a n/a

DOC02: n/a n/a n/a n/a n/a n/a n/a

DOC03: n/a n/a n/a n/a n/a n/a n/a

DOC04: n/a n/a n/a n/a n/a n/a n/a

DOC05: cbe cbe cbe cbe cbe cbe cbe

DOC06: 0.0 0.0 0.0 0.0 0.0 0.0 0.0

DOC07: n/a n/a n/a n/a n/a n/a n/a

DOC08: n/a n/a n/a n/a n/a n/a n/a

DOC09: n/a n/a n/a n/a n/a n/a n/a

DOC10: n/a n/a n/a n/a n/a n/a n/a

DOC11: n/a n/a n/a n/a n/a n/a n/a

DOC12*: 0.0 0.0 -50.0 -70.0 75.0 75.0 270.0

DOC13**: cbe cbe cbe cbe cbe cbe cbe

DOC14: cbe cbe cbe cbe cbe cbe cbe

DOC15: n/a n/a n/a n/a n/a n/a n/a
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Total 0.0 0.0 -50.0 -70.0 -75.0 -75.0 -270.0


* Savings result from other agency programs

** Savings are achieved in the year 2000

cbe = Cannot be estimated (due to data limitations or uncertainties
about implementation timelines).

n/a = Not applicable (recommendation improves efficiency or redirects
resources but does not directly reduce outlays).




Change in Revenues by Fiscal Year (Dollars in Millions)
*******************************************************

Recommendation
1994 1995 1996 1997 1998 1999 Total
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
DOC01: n/a n/a n/a n/a n/a n/a n/a

DOC02: n/a n/a n/a n/a n/a n/a n/a

DOC03: n/a n/a n/a n/a n/a n/a n/a

DOC04: n/a n/a n/a n/a n/a n/a n/a

DOC05: cbe cbe cbe cbe cbe cbe cbe

DOC06: 0.0 75.0 75.0 75.0 75.0 75.0 375.0

DOC07: n/a n/a n/a n/a n/a n/a n/a

DOC08: n/a n/a n/a n/a n/a n/a n/a

DOC09: n/a n/a n/a n/a n/a n/a n/a

DOC10: n/a n/a n/a n/a n/a n/a n/a

DOC11: n/a n/a n/a n/a n/a n/a n/a

DOC12*: n/a n/a n/a n/a n/a n/a n/a

DOC13**: cbe cbe cbe cbe cbe cbe cbe

DOC14: cbe cbe cbe cbe cbe cbe cbe

DOC15: n/a n/a n/a n/a n/a n/a n/a
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Total 0.0 75.0 75.0 75.0 75.0 75.0 375.0

* Savings result from other agency programs

** Savings are achieved in the year 2000

cbe = Cannot be estimated (due to data limitations or uncertainties
about implementation timelines).

n/a = Not applicable (recommendation improves efficiency or redirects
resources but does not directly create revenue).



Appendix B
**********


Accompanying Reports of the National Performance Review
*******************************************************


Governmental Systems
Changing Internal Culture Abbr.
************************* ****

Creating Quality Leadership and Management QUAL

Streamlining Management Control SMC

Transforming Organizational Structures ORG

Improving Customer Service ICS



Reinventing Processes and Systems
*********************************

Mission-Driven, Results-Oriented Budgeting BGT

Improving Financial Management FM

Reinventing Human Resource Management HRM

Reinventing Federal Procurement PROC

Reinventing Support Services SUP

Reengineering Through Information Technology IT

Rethinking Program Design DES



Restructuring the Federal Role
******************************

Strengthening the Partnership in
Intergovernmental Service Delivery FSL

Reinventing Environmental Management ENV

Improving Regulatory Systems REG


Agencies and Departments Abbr.
************************ *****

Agency for International Development AID

Department of Agriculture USDA

Department of Commerce DOC

Department of Defense DOD

Department of Education ED

Department of Energy DOE

Environmental Protection Agency EPA

Executive Office of the President EOP

Federal Emergency Management Agency FEMA

General Services Administration GSA

Department of Health and Human Services HHS

Department of Housing and Urban Development HUD

Intelligence Community INTEL

Department of the Interior DOI

Department of Justice DOJ

Department of Labor DOL

National Aeronautics and Space Administration NASA

National Science Foundation/Office
of Science and Technology Policy NSF

Office of Personnel Management OPM

Small Business Administration SBA

Department of State/ U.S. Information Agency DOS

Department of Transportation DOT

Department of the Treasury/
Resolution Trust Corporation TRE

Department of Veterans Affairs DVA
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