If the Trump administration wants to save Uncle Sam big bucks, it doesn’t have to plan the “deconstruction of the administrative state,” as White House aide Stephen K. Bannon wants.
Instead, it could do something much less dramatic and much more effective — follow the advice of the Government Accountability Office (GAO).
Every year since 2011, GAO number-crunchers have looked at federal programs that overlap, are fragmented or are duplicative. It found dozens for the 2017 annual report.
The GAO doesn’t get much ink or airtime, but Congress recognizes the value of the agency’s work. It received bipartisan praise when the report was released at a Senate hearing last week.
Sen. Ron Johnson (R-Wis.), chairman of the Homeland Security and Governmental Affairs Committee, said the reports have “resulted in $75 billion worth of savings over seven years, which is pretty remarkable. Based on the amount of budget authority that the GAO has, $3.8 billion over that same time frame, that’s a 20-to-1 return on investment, which is pretty good.”
That is very good, even without counting the $61 billion in estimated savings that remain in the pipeline. Better yet is the 112-to-1 return on investment that the GAO said its 2016 recommendations would generate.
Rather than cutting needed programs like those at the Environmental Protection Agency, whose budget is targeted for a 31 percent reduction under President Trump’s spending plan, he should focus on implementing GAO suggestions to make government more cost-effective.
Sen. Claire McCaskill (Mo.), the top Democrat on the panel, said, “From 2011 to 2016, the federal government has saved American taxpayers approximately $136 billion by carrying out GAO’s recommendations,” though “nearly half of the actions GAO recommended in the past reports have not been implemented.”
That’s a road map for Trump.
“This year’s report adds 79 new actions in 29 different areas that range across the federal government,” said Gene L. Dodaro, the U.S. comptroller general, who heads the GAO. As usual, he testified without notes like a bureaucratic savant.
Dodaro told the lawmakers he is “worried about the overall fiscal health of the federal government.”
In fact, “the federal government’s on a long-term unsustainable fiscal path,” Jessica Lucas-Judy, the GAO’s strategic issues director, said in a podcast about the report. “And as policymakers are facing difficult choices, GAO’s report provides almost 400 different opportunities to make the government more efficient and more effective.”
Pointing to examples of duplication at the Defense Department, Dodaro told the senators that the department would “save tens of millions of dollars by better managing their virtual training programs and integrating them and simple things like advertising for recruitment purposes, where there are seven different advertising programs competing in the same market.”
We’re not going to look at all 79 new actions, so let’s stay with the Pentagon. Admittedly, it’s an easy target because it’s so big, spends so much money and has so many places to be more efficient. One is with Navy shipbuilding contracts.
Paying shipbuilders to fix things on new ships that should have been delivered without flaws is an expensive problem. The Navy paid $4.9 million to correct issues, on top of the purchase price.
“This means the Navy paid the shipbuilder to build the ship as part of the construction contract, and then paid the shipbuilder to repair the ship when defects were discovered shortly after delivery — essentially rewarding the shipbuilder for delivering a ship that needed additional work,” the GAO reported. “For example, on LPD 25 — an amphibious transport dock — the Navy determined that shipbuilder actions resulted in peeling hull paint shortly after delivery and subsequently submitted a guarantee claim. Since, under the contract’s guarantee clause, the contractor was not obligated to make the repairs at its own expense, the Navy paid the shipbuilder to repaint the vessel.”
Navy officials told the GAO this is cheaper because a warranty in the purchase contract would increase the cost more than the price of repairs. But a shipbuilder should have enough confidence in its product that problems should be covered by the purchase price, much like for a new car.
That’s the way the Coast Guard operates. It requires “the shipbuilder to repair and pay for an unlimited amount of shipbuilder-responsible defects within the first year after delivery,” the GAO said. “The Coast Guard has claimed over $1.5 million worth of repairs under the ship’s warranty — a 145 percent return on investment when comparing repair cost savings to the cost for the warranty.”
It seems the big Navy can learn something from the small Coast Guard.
The GAO said the Navy should “structure contracts so shipbuilders cannot earn profit for correcting defects for which they are responsible” and consider using warranties. Defense officials told the GAO that they would study this common-sense recommendation and report by December 2016.
As of Friday, the Pentagon had not provided the GAO with that report.