The board of top bureaucrats at the Small Business Administration who handed out federal bonuses this year concluded that, while it is better to give than to receive, it's best both to give and to receive.
After a lengthy search for the most effective managers in the agency, the "performance review board" chose -- guess who? -- themselves.
Seven of the nine members of the selection board were awarded cash bonuses under the new performance incentive program for the Senior Executive Service. The other two committee members were ineligible. The winners, it was explained, discreetly left the room when their colleagues voted on their bonus checks.
The seven board members are among 15 SBA executives who received bonuses ranging from $2,644 to the top, $5,289. One of the seven received $4,760 in bonus money for setting up the bonus system.
The only two board members who didn't receive bonuses were ineligible because they are presidential appointees. One of them was later criticized for improper personnel practices by the Merit System Protection Board, which suggested he be fixed and barred from government service for five years.
In other words, all board members who were eligible for a bonus get one.
Alan K. Campbell, director of the Office of Personnel Management which oversees the new federal bonus system, said he isn't surprised that some of the board members received bonuses, because the agency's best employes are supposed to make the bonus recommendations. But he added. "I'm a little surprised that 100 percent of them got an award."
Campbell was asked if it might be advisable for the executives, who earn between $49,198 and $50,112 a year, to serve on the board for one year and request that they not be considered for a bonus that year to avoid the appearance of conflict of interest. The next year they would be replaced on the board and then become eligible for a bonus.
"I don't think you should ask people to make that sacrifice," Campbell said. "I think this is asking for a sacrifice that is unfair."
The seven performance review board members and their bonuses were: William T. Gennetti, district director of the Philadelphia district office, $3,173; Donna R. Harrigan, Chicago regional administrator, $5,289; Bernard Kulik, assistant administrator for procurement assistance, $3,967; Jean P. Lewis, assistant administrator for congressional and legislative affairs, $4,760; Joe Maas, assistant administrator for personnel management, $4,760; Albert J. Prendergast, deputy chief counsel for advocacy, $3,838, and George H. Robinson, special assistant and director for equal employment opportunity and compliance, $2,644.
The SBA doled out $59,246 to 15 of a possible 45 senior executive service employes. Because it was the first year for the program, employes were evaluated only during a six-month period and therefore were given bonuses half the size they could ordinarily receive.
The merit pay program, which also sets standards for its employes followed by periodic review by supervisors, has been "the most significant thing that has happened to help managers to manage," said William Mauk, SBA deputy administrator. "Managing government is a very difficult task."
The SBA will eventually serve as an example to other government agencies on how to manage, Mauk said.
SBA Inspector General Paul Boucher, who uncovered abuses in the SBA's minority government procurement programs, received a $5,289 bonus. Boucher's study found that 1,505 firms in the minority business procurement program might not have been qualified.
Other abuses ranged from millonaires receiving assistance under the program to whites serving as fronts for minorities in order to receive minority assistance contracts and funds.
As a result of the merit pay program Mauk said that the SBA has had "its most productive year ever." The agency has increased awards of loan guarantees to small businesses, minority business contracts and management assistance. Mauk said. The agency also helped the White House Conference on Small Business and subsequent passage of small business legislation, Mauk said.
What has the agency done to perform better? Mauk said the merit system helped "estalish goals. And supervisors are telling subordinates what things are important." The system forces subordinates to perform because the senior executives who are eligible for the bonuses strongly suggest that they do their work, Mauk said.
Lewis, a performance review board member who was recruited by Mauk from the Agency for International Development where they once worked together, said she was "delighted that I was one of the recipients" and that she saw no conflict in being on the board that selects bonus recipients and also receiving a bonus.
The board members were selected because of their excellence, she said. "I think it would have been hard to find someone who would want to be on the board if they were ineligible for an award," Lewis said.
Lewis was credited with strengthening relations with congressional staffs investigating the SBA or holding hearings on the agency's budget and other small business matters, she said. She also keeps SBA officials informed of legislation affecting the agency.
"You might think there's a definite advantage to being on" the board, said Richard L. Osbourn, deputy associate administrator for personnel management. "But we wanted the best and most knowledgeable [executives] on the board."
When it came time for the board members to discuss bonuses for themselves, the individual in question was asked to leave the room. Osbourn said. SBA Administrator A. Vernon Weaver had the final decision on the bonuses.
The senior executives were rated by their superiors. Of the 45 employes, 10 were rated highly successful, 31 were fully successful and 4 were minimally successful, Osbourn said. None was rated as unsatisfactory. Those who were minimally successful were sent letters informing them of their low ranking and warned that if it was repeated in the next testing period some action would be taken against them. Osbourn wouldn't release the names of those receiving low ratings.
One bonus recipient who wasn't on the selection board was Paul G. Swope, director of the office of data management who received a $4,364 award for restructuring the agency's computer systems with the aid of several small and minority-owned firms, he said. The new system made information gathering and distribution through networks around the country quicker and easier. "It did away with a whole lot of paper and God knows there's a plethora of that in the government," Swope said.
Others receiving bonuses and their awards were: Roger H. Jones, assistant administrator for data and management services, $2,644; F. Dean Lupkey, Kansas City regional administrator, $3,838; Robert F. McDermott, deputy associate administrator for procurement assistance, $3,838; Raymond F. Randolph, assistant inspector general for audits, $3,702; John L. Smith, Chicago District Director, $3,173, and Robert B. Webber, associate general counsel for litigation, $3,967.