INDEPENDENT REPORT BY NATIONAL ACADEMY OF PUBLIC ADMINISTRATION SHOWS THAT HUD MANAGEMENT REFORMS ARE WORKING

• Full Report

WASHINGTON - Housing and Urban Development Secretary Andrew Cuomo today welcomed the release of a new report by the independent National Academy of Public Administration that concluded HUD has substantially improved its contracting operations.

"This independent report shows that HUD's management reforms are working and that we are restoring the public trust in this Department," Cuomo said. "The report is clear evidence that our efforts to reduce waste, fraud and abuse in HUD programs are succeeding and that we are doing a better job serving the American people."

The report, titled HUD Procurement Reform: Substantial Progress Underway, found that HUD has taken a series of actions to improve its contracting operations resulting in "substantial progress toward the goal of developing and implementing a model procurement system."

The report goes on to say: "Secretary Andrew M. Cuomo, the department leadership team, and staff working on procurement reform deserve commendation for this substantial progress."

Congressman James Walsh of Syracuse, NY, a member of the House Appropriations Committee who requested an independent review of HUD's contracting operations, said today: "I congratulate HUD for the progress the agency has made in improving the procurement process. While much more work needs to be done in following through on NAPA's recommendations, this is a very good first step in the right direction."

NAPA is recognized for its expertise in management of public organizations. It employs former top-level federal government executives to evaluate the performance of federal agencies.

NAPA's report is the latest in a series of reviews by outside observers verifying HUD's progress in reforming its management and operations. These observers include government reinvention expert and management consultant David Osborne, management consultant Booz-Allen & Hamilton, and PricewaterhouseCoopers LLP (see attachment).

HUD made procurement reform a central element of its sweeping 2020 Management Reform Plan issued by Cuomo in June 1997. The 2020 Reform Plan stated that it was designed to transform HUD from "the poster child for inept government" that "has been plagued for years by scandal and mismanagement" into "a new HUD, a HUD that works."

Cuomo said that HUD is dedicated to continuing its 2020 Management Reform efforts including reform of its contracting operations. He said that NAPA's report not only validates HUD's efforts to date, but provides guidance that will aid the future success of HUD contracting.

Major improvements in HUD's procurement system that drew favorable evaluations from NAPA included:

• Hiring a professional Chief Procurement Officer to take charge of procurement reform efforts.

• Identifying effective and efficient procurement as a mission-critical activity.

• Establishing a Contract Management Review Board of senior Department leaders "to provide guidelines, review plans, set standards, and facilitate procurements."

• Accomplishing high priority procurements more quickly by using integrated project teams of contracting and program experts.

• Reorganizing the procurement office to provide enhanced specialization and ease workload burdens.

• Using performance-based contracting to achieve the goals of the contracting operation.

• Training and establishing full-time contracting officer technical representatives to help achieve desired results.

• Introducing a comprehensive procurement planning process.

After identifying contracting as a critical aspect of the Department's operations and its 2020 Reform efforts, Cuomo called for a "top-to-bottom redesign" of HUD's contracting system. NAPA later independently reviewed the major steps of HUD's redesign.

Beginning in September 1997, NAPA looked at each step of the procurement process from the identification of a need through the award of a contract. Department staff worked closely with NAPA to give NAPA complete access to HUD's contracting operation. The result was a comprehensive inspection of this vital area of agency activity.

EXCERPTS OF INDEPENDENT REVIEWS OF HUD'S MANAGEMENT REFORMS

• Management Expert David Osborne, author of Reinventing Government, wrote in 1998 that management reform at HUD "as it is being implemented today represents one of the most ambitious, fundamental and exciting reinvention plans in the recent history of the federal government."

• A review by management consultants Booz-Allen & Hamilton concluded in March 1998 that HUD has made "significant progress towards achieving the many management reforms that are critical to making the Department function effectively."

• Another outside review of HUD's reinvention performed by PricewaterhouseCoopers LLP concluded in December 1998 that HUD's management reform plan is successfully moving forward on schedule. The review said that "implementation of the Community Builders, Enforcement Center, Procurement Reform, Real Estate Assessment Center, Storefronts, and Troubled Agency Recovery Center is well under way. Each project met all or substantially all of the critical milestones that HUD established for completion as of September 1."

• A survey found in December 1998 that 70 percent of HUD employees believed the Department has made reinvention an important priority - the highest percentage of any of 22 federal agencies surveyed. The employee survey was performed by the National Partnership for Reinventing Government, which is headed by Vice President Al Gore. The Vice President said: "Through REGO (the reinventing government initiative) - and thanks to the extraordinary leadership of Secretary Andrew Cuomo - we turned HUD around."

• A report in early 1999 by the General Accounting Office of Congress said: "HUD continues to make credible progress in overhauling its operations to correct its management deficiencies" and called Cuomo's management reform plan "a major contributor to this progress."

• The HUD Office of Inspector General issued the first clean audit of HUD's financial statements in the Department's history in March this year. This means that for the first time, the Department's financial statements are in complete compliance with all applicable federal requirements. While the audit also summarized many of the past criticisms that the Office of Inspector General has made of the Department, the Inspector General wrote that the audit "represents a considerable achievement for HUD, and it further reflects continuing improvements in HUD's commitment and ability to properly account for the funds entrusted to the Department."