Executive Order 12637

by President of the United States

By virtue of the authority vested in me as President by the Constitution and laws of the United States of America, including the Budget and Accounting Act of 1921, as amended, and in order to further improve a comprehensive program for the improvement of productivity throughout all Executive departments and agencies, it is hereby ordered as follows:

Section 1. There is hereby established a government-wide program to improve the quality, timeliness, and efficiency of services provided by the Federal Government. The goal of the program shall be to improve the quality and timeliness of service to the public and to achieve an annual average productivity increase of 3 percent in appropriate functions. Each Executive department and agency will gradually include appropriate functions in the Productivity Improvement Program, so that by 1991 all appropriate functions are covered.

Sec. 2. As used in this Order, the term:

(a) "Productivity" means the efficiency with which resources are used to produce a government service or product at specified levels of quality and timeliness;

(b) "Appropriate functions" means those agency program functions that produce measurable outputs in the form of services to the public;

(c) "Public" means a customer outside the organization, such as citizens, businesses, State and local governments, other countries and/or their citizens, other agencies, the military;

(d) "Outputs" means products or services delivered to the public;

(e) "Measurement system" means both the specific measures used to determine whether standards of quality, timeliness, and efficiency of services are being met, and the procedures for the collection and reporting of data resulting from application of productivity measures;

(f) "Organizational performance standard" means a statement that quantifies and describes the desired level of quality, timeliness, and efficiency of services to be provided by an organization;

(g) "Management review" means the review by the Director of the Office of Management and Budget, as part of the budget process of agency accomplishments and plans for management and productivity improvements.

Sec. 3. The head of each Executive department and agency shall:

(a) Develop a complete inventory of all appropriate functions to be included in the productivity program, use the agency's planning process to review current functions, and develop agency goals and objectives for improvement in services to the public.

(b) Develop and submit annually to the Office of Management and Budget a productivity plan. Each plan shall conform to the policy guidance issued by the Director of the Office of Management and Budget, pursuant to Section 5 of this Order, and shall:

(1) set forth the agency's productivity goals and objectives;

(2) target priorities for the year and expand coverage each subsequent year to additional appropriate functions, with the objective of complete coverage of all appropriate functions by 1991;

(3) describe the proposed actions designed to make the agency's operations and delivery of services more efficient and responsive;

(4) describe the methods, including efficiency reviews and cost comparisons with the private sector, that the agency will use either to improve its own service, or to make use of commercial services available in the private sector when it is economical to do so; and

(5) describe the measurement systems to be used by the agency to gauge quality, timeliness, and efficiency.

(c) Implement the productivity program after the Management review by the Director of the Office of Management and Budget as provided in Section 6.

(d) Assess annually the agency's progress toward achieving objectives and priorities, including documented gains and cost savings. This assessment will form the basis of the agency's report to the President as required by Section 4.

(e) Designate a senior official responsible for guiding the agency's productivity improvement program.

(f) Inform agency managers and employees that they are expected to be responsible for improvements in the quality, timeliness, and efficiency of services.

(g) Include productivity and quality improvement goals in the performance appraisals of managers and supervisors.

(h) Encourage employee participation in the productivity program through employee training, employee involvement in workrelated decisions, incentives, recognition, and rewards and by taking actions to minimize negative impacts on employees that may occur as a result of the productivity program.

Sec. 4. The head of each Executive department and agency shall report annually to the President through the Domestic Policy Council on accomplishments achieved under the plan. The annual report will form the basis of the Management Report to the Congress.

Sec. 5. The Director of the Office of Management and Budget is authorized to:

(a) Develop and promulgate goals, policies, principles, standards, and guidelines for the effective administration of this Order by Executive departments and agencies; and

(b) Identify and propose the elimination of statutory and regulatory barriers that inhibit opportunities to make improvements in productivity.

Sec. 6. The Director shall review, through the management review process, each agency's productivity plan based upon the requirements and guidance issued pursuant to Section 5 of this Order. Nothing in this Section shall be construed as displacing agency responsibilities delegated by law.

Sec. 7. The Director of the Office of Management and Budget shall submit to the Congress, in conjunction with the President's budget, a report on productivity plans and accomplishments of the agencies and the government as a whole.

Sec. 8. The Director of the Office of Personnel Management shall:
(a) Review Federal personnel policies and programs and make or recommend such changes as are appropriate to support productivity improvement;

(b) Review incentive policies and programs for Federal employees and make or recommend such changes as are appropriate to increase the productivity of the Federal Government;

(c) Develop and implement training programs for Federal employees in support of productivity improvements;

(d) Review policies and programs for Federal employees who may be displaced by productivity improvements and make or recommend such changes as are appropriate to ensure that such policies and programs will minimize any adverse impact on Federal employees.

Sec. 9. Executive Order No. 12552 of February 25, 1986, is hereby superseded.

RONALD REAGAN
The White House,
April 27, 1988.

[Filed with the Office of the Federal Register, 11:01 a.m., April 28, 1988]