LETTER TO MR. JAMES H. TAYLOR FROM DONALD G. OGILVIE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00498A000300050032-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 8
• Document Creation Date: December 9, 2016
• Document Release Date: August 7, 2000
• Sequence Number: 32
• Publication Date: September 16, 1976
• Content Type: LETTER

k : GUIIVE 0FFI E OF THE PRE
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r ~_ s OFFICE OF MANAGEMENT
WASWINrMC]iN- D.C. 20503
1976
*OMB Waiver Letter In ERU File*
Mr. Jaiw.,:,i H. Taylor
Comptrol .I.!r
Central :Critelligence Agency
Wash_i.ngtOf, D. C. 20505
Dear Jim:
invo
This is in response to the Central Intelligence Agencys
August 24, 1976 submission as part of the Presidential Manage-
ment Initiatives effort (PMI). I would like to take this
opportunity to provide you with OMB's observations and to
share with you my views on the Agency's continued participa-
tion in this effort.
On the whole, I am pleased with the Agency's response and
commend you on the progress the organization is making in many
management improvement areas. However, I do believe that fur-
ther effort is needed and that the next PMT submission should
emphasize specific actions and results. The attachment contains
comments on the Agency's response to the various PMI subject
areas and suggests the manner in which follow-up should take
place.
There are some PMI areas which I feel should also be addressed
by the larger intelligence community. Therefore,_while the
Cent:_1 Yntelligence Agency will continue to be regarded as a
full cipant in the PMI effort, my staff will be contacting
the :i.-- - igence Community Staff about how it should become
I do ;ti*~int to stress that both the President and the Office of
Manay,rmrnt and Budget regard this effort very seriously. Your
cont:i.r u: 1 interest and support are appreciated.
Sincerely yours,
Donald G. Ogilvie
Associate Director
Intelligence Community Staff
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 I-
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Central Intelligence Agency
Decisa.onmaking and Departmental Organization
I. Policy Analysis Staff
t?esponse satisfactory. Follow-up by OMB budget
examiner as part of FY 1978 budget review.
II. Mf3O Program
FY 1977 and FY 1978 Agency MBO's are requested as
soon as possible to be reviewed by the 0MB budget
examiner in conjunction with the FY 1978 budget.
review. OMB review of intelligence community
objectives will be pursued with the IC Staff.
III. Decisionmaking
Timetable in report is acceptable.
IV. Organizational Review
Personnel inventory discussed in 5. III does not
specify milestones or timetable for review of
layering and excessive subdivision. By October 21,
a revised plan should be submitted to include these
omissions and greater detail on plans to consolidate
sub-units and to develop guidelines for "assistant to"
positions. A statement identifying review criteria.
for the personnel inventory is also requested. The
C Staff will be asked to develop an organizational.
review plan.
2. Ev.-:'.-.ation of Current Programs
I.. Policy and Evaluation Unit
Response satisfactory. Follow-up by OMB budget
examiner as part of FY 1978 budget review.
IT. Efficiency Evaluations
).;valuation plans and timetables are generally
acceptable. Specific comments regarding the ADP
efficiency evaluations will be communicated separately
by the OMB budget examiner. Identification of addi-
tional areas to be reviewed will be explored by OMB
budget examiner during FY 1978 budget review and in
discussions with the IC Staff.
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III. Management Plans
OMB guidance will be forthcoming.
3. Rvvdut_Lion in the Burden of Federal Reporting and Regulation
No action required.
4. Contracting Out and Holding Down Overhead Costs
I. Contracting Out
-This has been identified as an emphasis area and
will be pursued by the OMB budget examiner during
the FY 1978 budget review and in accordance with
0MB Circular A-76. IC Staff involvement will be
pursued.
II. Overhead Costs
Detail is requested on the organizational location
and modus operandi of existing agency systems for
determining and analyzing overhead costs. Report
requested by October 21.
By September 21, agency compliance with OMB Bulletin
76-9 is requested. This response to OMB should in-
clude plans for achieving travel savings in FY 1977
and FY 1978.
ADP practices have been identified as an emphasis
area. Plans for improving management of ADP re-
sources will be submitted on September 21. Supple-
::'ental guidance is attached.
'tio action required on cash management or mailing
practices. Report acceptable on reproduction
equipment. Possible further review of audio-visual
activities will be explored by the OMB budget
examiner.
By October 21, submit plan to OMB on proposed steps
to achieve savings in telephone equipment and usage.
Space utilization and records storage will be reviewed
by the OMB budget examiner during the FY 1978 budget
review.
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t7OTE: Further guidance from OMB on mailing practices,
reproduction equipment, telephone equipment and usage,
::.pace utilization and records storage will be forth-
coming. This may involve information requirements for
the October 21 monthly progress report.
5. Pi r?:cotlnel Management
1:. Executive Selection and Development
Report acceptable. Subject will be pursued by the
OMB budget examiner as appropriate.
II. Work Force Quality
Report plan and timetable acceptable.
III. Position and Classification Management
As indicated in item 2.IV., a statement identifying
review criteria for the personnel inventory is re-
quested. Civil Service Commission Bulletin No. 250-7
should be carefully reviewed as these criteria are
developed. Report plan and timetable acceptable.
This has been identified as an emphasis area and will
be addressed by 'the OMB budget examiner during the
FY 1978 budget review. in addition, it will be dis-
cussed with the IC Staff.
IV. Productivity Measurement
Report not entirely responsive to PMI. By October 21,
a progress report is requested. This report should
also address the application of productivity measures
in supporting staffing and budget requirements and for
purposes of management evaluation and control. This
area will be pursued by the OMB budget examiner during
the FY 1978 budget review.
~~ . Isloyment Ceilings
Report acceptable. No further action required at
this time.
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 Supplemental' Guidelines
PMI 4B3 - ADP Practices
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1. INTRODUCTION
The primary objective of the ADP initiative was to encourage
activities which will reduce costs and address specific pro-
blem areas; it was not meant to stimulate the expansion of
current ADP activities. However, the inclusion of initiatives
where substantive benefits can be realized through further
investtuiont is not precluded. -If an activity is identified for
which c::ip:ital investments are required to realize significant
benefit:. the proposal should include a full evaluation of the
alternatives, the costs and benefits, and the funding require-
ments for each alternative. If this information is not avail-
able at this time the submission should include the date by
which such an evaluation will be completed.
All activities submitted, whether or not they require additional
capital investment, should meet the following criteria:
Include only those items for which tangible and measurable.
cost reductions or other benefits can be demonstrated.
? Include only those items where significant cost reductions
or benefits can be identified which are deserving of
Presidential attention.
? Identify the means by which cost reductions and benefits
will be measured.
Include an assessment of the budgetary impact and require-
ments of any proposals which involve FY 77 outlays beyond
those in current budget guidance, or involve FY 78 sub-
sequent resource decisions. Any initiative which recommends
the e:cpenditure of funds which have not been previously
approve: shall allow for the orderly evaluation of such
proposal in the normal budget process. _
? A pla_: ; Outlining the agency's approach including key mile-
ston ; , d the dates by when they will be completed, should
-be dc.,.vcloped for each of the six ADP practices suggested.
If an orjency does not believe it can realize benefits in one
or mc:oco. of the six areas, a negative report outlining the
reason, why should be submitted in lieu of the plan.
II. COST REDUCTION INITIATIVES
The fir.::;t three of the six PMI's were aimed primarily at
reducing cost. Examples of activites which can be undertaken
to achieve cost reductions or other benefits are identified
for each, In no way is this meant to be a comprehensive list
of possible actions.
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A. Reduc.i.ng the unit- cost of data processing - Consider
items such as but not limited to the following:
? Establishing targets for increasing reimbursable sharing
of any excess capacity.
? A:; sure that all computer support performed for users
ou L s i.de of the agency is done on an appropriate cost
reimbursable basis.
? Reducing hours of operation to those required to meet
cost justifiable workload levels.
? Eliminating marginally used equipment by relying on
other agencies or the private sector for such specialized
services.
? Improve operational efficiency of existing systems or
applications.
? Shift workload to other computer systems when such
applications can be processed more efficiently on other
systems.
? Consider consolidation of operations.
? Measure the amount of ADP resources required per applica-
tion or system and allocate resources on the basis of
value received.
? Reevaluate previous lease vs purchase determinations.
? Increase workload volume without increasing ADP resources..
B. E'.`I.ate nonessential or marginal workload - Consider
:
in
ll
f
g
ow
o
such as but not limited to the
F ~:t_ablish a plan for evaluating the cost/benefits and
ot`ed for all existing applications.
o Y v.l.uate the adequacy of existing processes for justify-
i.rtg new applications.
:t:::,t: ablish a certification program for ADP systems and
l.p1ication.s . .
C. Rcec!t.tr..e equipment rental through increased competition -
Con .der items such as but not limitea to the following:
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 ? Where leased hardware is"-available f'--m third party
3 DG -to compe-
Appr( ~r~`i~FReleal/t?:6 L~F$7 98
AGOb 31
ZLion wit Tin the last 12 months, de. elop specific
plan, for recompeting such leases.
? Where "plug to plug" compatible equipment is available
from sources other than the original equipment manu-
facturer -- and the agencies have not taken advantage
of lower rental rates generally available through such
sources -- specific timetables should be established
for evaluating cost reduction possible by use of such
"plu.g to plug" compatible equipment.
? Make greater use of broader performance specifications
to expand opportunities for greater competition..
? Consolidate procurement requirements within the agency
- particularly for terminals and minis.
III. MANAG LMENT IMPROVEMENT INITIATIVES
The last three ADP PMI's are intended to stimulate activities that
will improve the management of ADP resources. While the primary
emphasis of the cost reduction initiatives was on economy, these
initiatives stress efficiency and effectiveness. Agency actions
in this area should be designed to achieve objectives such as
maximizing alternatives in the planning process and minimizing
operational errors.
A. Analyze the need and methods used for expanding Government
computer capacity - Consider items such as but not limited
to the following:
? Strengthen planning processes.
? Assure that alternative approaches for, meeting needs are
obj wtively evaluated.
? Ma.:'- .treater, use of surplus capacity available from other
a;"::_._es.
? Esct:.=ibiish time table for A-76 evaluation.
B. Min ~r~i: _e the automatic computer issuance of inaccurate or
unne. cm' ; 5ary checks and purchase orders -- Consider items such Lz ; but not limited to the following:
? Revi.ew and evaluate all applications, procedures, criteria
and programs.
? Es~t.::i biish -more rigid criteria and control procedures.
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 Apps ? F4 Oq i Nl fl9 .6- 3A-0fl~WOg 9 ~i ion or
verification as appropriate.
? Establish system of cross-check's and balances.
? Establish audit and measurement procedures.
? Establish systems design criteria to minimize errors.
? Dcavf--Jop standards for system design and operation.
C. Strerrqthen agency ADP management to overcome problems of
comb')utter fraud and security - Consider items such as but
not lirn.ited to the following:
? Establish timetable for independent review of the
adequacy of current security procedures for each
installation.
? Establish procedures for spot checks of processes and
facilities by independent reviewers.
Audit processes to guard against fraud.
? Develop security guidelines and procedures to safeguard
systems.
? Review internal control procedures for each system
identified that may be susceptible to computer related
crime.
? Establish a security office with operational responsi-
bility to safeguard systems and facilities.
? Establish a monitoring system to remain cognizant
o` -cssible problems.
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