Applying Private Efficiencies to Public Money

It is at least a starting point that the Government Accountability Office (GAO) is starting to assess different government agencies against project management best practices (as defined by the Project Management Institute, or PMI). It is interesting that they are starting with the Department of Housing and Urban Development (HUD). On one hand, it makes sense since they deal with physical properties and construction, which lend itself better to traditional project management. On the other hand, it may not be the most effective place to start in the government (healthcare would have a bigger impact, for instance).

The six categories HUD was assessed within were: (1) project charter, (2) work breakdown structure, (3) project management plan, (4) requirements management plan, (5) requirements traceability matrix, and (6) acquisition strategy.

Interestingly, most projects had charters, but not clear accountability (insert joke about government (in)efficiencies here). Potentially more concerning, is at least two projects under major initiatives lacked “development” in four of the six categories, which implies minimal/insufficient project management over the project.

With the increasing pressure on the government (like the private industry) to do more with less, the historical inefficiencies will no longer be acceptable. One key way to deal with this is not to actually do less, but to be efficient by reducing overhead (i.e., project management). The fundamental advantage to project management (besides success) is planning ahead – which the government needs to do more of.

Hopefully, the GAO will continue to assess various government agencies (AND follow-up to confirm changes are made) so that the use of taxpayer’s money is as efficient as the use of money within the private sector.

Source: “HUD falters at project management”, June 14, 2013 (http://fcw.com/Articles/2013/06/14/GAO-HUD.aspx?Page=1)

Goodbye Small Business?

Small businesses in the United States have it bad. This is true because of too much regulation, high taxes, and now an increase in minimum wage.

So many rules and regulations exist its hard to keep up with the sheer volume of it all. With over 160,000 pages of rules, small businesses are having a hard time making sense of what is right and wrong. Alison Fraser, Director of the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation, says this is “a regulatory assault on our system of free enterprise and on our job creators” and I have to agree (1). The only people who will be able to withstand and flourish alongside more regulation are big businesses. This is because they have the capital, resources, and power to manage operations according to any new rule the government spits out. In comparison, small businesses will be scrambling to make ends meet.

What’s worse is that the United States also has one of the highest corporate tax rates in the world. At a rate of 35%, corporations of all sizes are suffering. Corporate taxes consume the part of revenue that  could otherwise be spent on research and development, more efficient technology, and on job creation. In direct relation to operations management, Laura Tyson, a contributer to Business Insider, says that “corporate-tax expenditures narrow the base, raise the cost of tax compliance, and distort decisions about investment projects, how to finance them, what form of business organization to adopt, and where to produce” (2). And when project costs go up, the burden indirectly falls on consumers and shareholders: “American workers, consumers and shareholders bear the greatest part of the cost of higher corporate rates and a complex tax system because it ultimately can raise product prices and lower investment and growth in the United States” (3).

Finally, on February 12, 2013, President Obama asked Congress to increase minimum wage to $9. This proposal sparked negative outcries from all across the country because at a time when people are asking, ‘Where are the jobs?’ why would you want to make it harder for small employers to hire people? (4). Raising the minimum wage simply reduces the availability of entry-level positions across all industries. “The minimum wage is a learning wage, the first rung on many workers’ career ladders. A higher minimum wage saws off this rung” (4). By raising the minimum wage, high school students, college students, and disadvantaged adults will suffer not only monetarily, but also they will have less chances of learning valuable disciplines like getting to work on time and  interacting with customers. This can only negatively impact future business environments.

All in all, we can conclude that our current government is slow at trying to build a better foundation for small businesses. If they cannot act more quickly, the economy’s recovery will stall and there will be increasingly less work and productivity in America.

 

Works Cited

(1) http://www.foxnews.com/opinion/2012/03/28/too-many-rules-are-killing-america/

(2) http://articles.businessinsider.com/2012-05-04/markets/31567901_1_corporate-tax-rate-tax-code-special-tax-provisions#ixzz2QVMBZqrl

(3) http://money.cnn.com/2007/07/26/pf/taxes/business_tax_conference/

(4) http://www.huffingtonpost.com/2013/02/14/obama-minimum-wage-republicans_n_2680397.html