The NPR recommendations yield $108 billion in savings for
the 5 year period, FY1995-1999. $36.4 billion result from the
specific changes in individual agencies that were detailed in
Appendix A. The remaining $71 billion result from governmentwide
changes explained here.
This appendix provides the estimates of the governmentwide
changes, and the assumptions underlying those estimates. Savings
by major issue area are shown in Table B-1.
1. Streamlining The Bureaucracy Through Reengineering.
These estimates assume:
a. Agency reengineering will allow a 12% reduction of civilian
personnel over 5 years.
b. Administrative and central control staffs and supervisors
will be the primary areas for downsizing.
c. Attrition, enhanced severance, reassignment, relocation,
outplacement and retraining will be the primary tools to
accomplish the reduction.
d. Agencies will use other tools as necessary to accomplish the
12% reduction.
e. The 12% reduction includes and increases the
Administration's previously established 4% personnel
reduction goal for fiscal 1995.
f. Indirect costs associated with personnel, such as office
space and expenses, travel and supplies, are not included in
the dollar estimates.
2. Reinventing Federal Procurement
These estimates assume:
a. The General Service Administration's estimate that total
annual procurement costs equal $200 billion (GSA Federal
Procurement Report).
b. Savings can be generated by a variety of reforms in
procurement systems, including simplified acquisition
thresholds, labor law reforms, IT procurement reforms,
shifting from government specifications to commercial items,
expanded use of purchase cards, and electronic commerce.
c. Savings up to 12% of procurement spending may be achieved
through these reforms (study by Defense Systems Management
College). The NPR used 5% as a mid-range estimate.
d. To avoid double-counting, savings associated with reductions
in procurement personnel are excluded from this "reinventing
procurement" savings estimate.
3. Reeingeering Through Information Technology
These estimates assume:
a. A $25 billion baseline in information technology (IT)
spending, based on obligations reported through OMB circular
A-11 by executive branch agencies for acquisition,
operation, and use of IT systems.
b. 30% savings in IT systems may be achieved through
information infrastructure consolidation and standardization
-- this savings estimate is extrapolated from the "Defense
Information Infrastructure Initiative" (December 1992,
Resource Summary). Since Defense IT spending constitutes
roughly one-half of total IT spending it is assumed that
equal savings can be obtained from the IT budgets of
civilian agencies.
c. Savings from electronic benefits transfer and from
consolidation and modernization of the federal information
infrastructure; offsetting costs result from consolidation
and modernization of the law enforcement and safety mobile
networks and a program to provide citizens with better
access to government information.
d. Savings for electronic benefits transfer nationally may be
extrapolated from pilot programs in the states of New Mexico
and Minnesota.
e. Savings recommended for the Department of Transportation IT
consolidation and modernization are subtracted to avoid
double-counting.
4. Intragovernmental Administrative Costs.
Simplifying and reducing the federal government's reporting
requirements will generate savings at the federal, state, and
local levels. The estimate assumes that over 75% of the state and
local governments will accept a fee-for-service option in place
of existing cost reimbursement procedures from FY1995-1999 in
return for greater administrative flexibility. Eliminating cost
reimbursement procedures slows cost growth by 3% per year at the
federal level.
Table B-1. Estimates of Savings from NPR systems Teams
Recommendations
(dollars in billions)
FY95 FY96 FY97 FY98 FY99 Total
1. Streamlining the
Bureaucracy through
Reengineering 5.0 5.8 7.4 9.5 12.7 40.4
2. Reinventing Federal
Procurement 0.0 5.6 5.6 5.6 5.7 22.5
3. Reengineering Through
Information
Technology 0.1 0.5 1.2 1.6 2.0 5.4
