THE WHITE HOUSE
Office of the Press Secretary
PERFORMANCE AGREEMENT
BETWEEN
THE PRESIDENT OF THE UNITED STATES
WILLIAM JEFFERSON CLINTON
AND
THE ADMINISTRATOR OF THE SMALL BUSINESS
ADMINISTRATION
ERSKINE B. BOWLES
"TODAY'S SBA MEANS BUSINESS"
I. Introduction
The American people deserve a government that works better and costs less. The departments and agencies of the federal government hold vital keys to improving performance and to restoring the faith of the American people in their government. Many changes will need to take place for this broad goal to be realized. The purpose of performance agreements is to establish clarity and consensus about the priorities for departmental and agency management. They are intended to improve the management of the Executive Branch and are not intended to and do not create any legally enforceable rights. From these agreements should flow the program and management priorities of the departments and agencies. These agreements represent a beginning, a basis for continuous improvement as we reinvent our government to meet the needs and expectations of the American people.
II. The Small Business Administration
Providing quality customer service to the small business community is a proper mandate for the U.S. Small Business Administration. Aiding, counseling, assisting, and protecting small businesses is the SBA mission and my primary objective. Reflecting my business background, I am a results-oriented manager who wants to be held accountable. We at the SBA offer this agreement as a framework for measuring our success.
At the core of our culture is business; the classic examples of American ingenuity are often products of small businesses. The small business sector employs almost 60 percent of the private work force, contributes 54 percent of all sales in the country, and is responsible for 50 percent of private sector products. Virtually all of the nation's new jobs between 1988 and 1990 were contributed by small businesses. In 1993, 26 of the 100 fastest growing U.S. firms were small businesses, ten of which received SBA-backed venture capital. Small business is critical to our economic recovery, to building America's future, and to helping the United States compete in today's global marketplace. We are committed to making the SBA the champion of small business, nurturing the pioneering spirit which is so central to our tradition, so critical to our dream. Our vision for the SBA revolves around two words: OUTREACH and MANAGEMENT.
OUTREACH: We are determined to reach out to small businesses in an unprecedented way to listen to their needs, reporting these needs back to the President and suggesting policy initiatives. We will work to see that small business has a place at the economic table and we will continue to function as the President's "eyes and ears" regarding small business interests. As part of our promise to improve the SBA's outreach, we will work to free up capital and will increase the small business community's access to credit. We will specifically expand our management, technical and financial assistance to those small businesses most in need of our support, including minority and women-owned enterprises, rural and inner city businesses and high technology and export-oriented firms.
MANAGEMENT: For the foreseeable future, the SBA will have to meet escalating demands with fewer resources. To do so, we intend to be more efficient and effective, while emphasizing quality in our service delivery. We recognize the need to change our organizational culture and the way we do business. Our management goal will be to create a more entrepreneurial, customer-driven and efficient SBA. We will focus our scarce resources on those small businesses that have the greatest potential for job creation and maintenance, streamline our structure and processes, eliminate duplication, fraud and waste, and reinstill a sense of quality customer-service. We will work hard to restore a sense of pride among our people and to build in our organization a "can do" attitude based on mutual respect that puts people first, serves our customers and empowers our employees.
III. Policy Goals and Performance Measures
We are committed to the President's four policy goals for the SBA and wish to be held accountable for implementing them.
FREE UP CAPITAL FOR INVESTMENT IN SMALL BUSINESSES, WORK TO END THE CREDIT CRUNCH AND CREATE JOBS
To measure our performance, look at the SBA's contribution to:
--Businesses created, maintained and protected;
--Private investment stimulated, jobs created and tax revenues generated;
--Private capital increased and leveraged more effectively;
--Credit expanded credit for businesses with greatest potential and niche markets; and
--New and creative credit instruments developed.
ELIMINATE UNNECESSARY PAPERWORK AND REGULATIONS THAT INHIBIT THE GROWTH AND PRODUCTIVITY OF SMALL BUSINESSES
To measure what we do, look to see whether the SBA has:
--Reengineered, streamlined or eliminated its forms, processes and procedures;
--Monitored and enforced the Regulatory Flexibility Act and Paperwork Reduction Act as they impact small businesses;
--Proposed a list of government regulations to be reinvented or eliminated;
--Reduced credit documentation requirements for loans; and
--Streamlined procurement regulations and improved access to government contracting opportunities.
REINVIGORATE THE SBA TO CONSTRUCT A LEAN, HIGHLY-MOTIVATED ORGANIZATION FOCUSED ON THE NEEDS OF SMALL BUSINESSES
To measure our progress, assess whether the SBA has:
--Restructured itself to become more effective, efficient and customer-driven;
--Instituted performance measurement and management for results;
--Improved communications and created a shared vision;
--Applied modern information technology; and
--Improved financial management and expanded training, creating teamwork, an empowered "can-do" attitude, and accountable and productive employees.
BE THE "EYES AND EARS" OF THE PRESIDENT FOR SMALL BUSINESSES
To measure our success, determine if we have initiated:
--Town meetings with customers across America with reports to the President;
--Broader use of working task forces, customer surveys and focus groups to obtain customer feedback; and
--Policy suggestions to the National Economic Council from small businesses.
IV. Terms of Agreement
This agreement outlines four policy goals and supporting strategic objectives that we as an Agency are pledged to accomplish during my tenure as the SBA Administrator and provides specific performance measures for FY 1994 (Annex). This agreement will serve as the framework for the SBA's participation as a performance pilot agency under the Government Performance and Results Act of 1993, the platform for our strategic and performance planning, and the basis for measuring results and discussing progress with the President. Any specific reporting requirements will be developed jointly with the Agency.
This agreement is intended only to improve the internal management of the Executive Branch and is not intended to and does not create any right, benefit, trust or responsibility, substantive or procedural, enforceable at law or equity by a party against the United States, its agencies, its officers, or any person.
In sum, this agreement reflects our joint commitment to a Small Business Administration that works better, costs less, and honors our sacred trust to the American people. Unless and until modified, it will guide our efforts at the Small Business Administration.
Submitted by: Approved and Agreed:
ERSKINE B. BOWLES WILLIAM J. CLINTON Administrator President of the United States
Small Business Administration
Annex: Strategic Objectives and Program and Management Priorities
STRATEGIC OBJECTIVES AND PROGRAM AND MANAGEMENT PRIORITIES
To accomplish the mission entrusted to the Small Business Administration by the President, we have established ten strategic objectives, which support the four principal policy goals discussed above in this performance agreement. Accomplishing each objective will fulfill our broad mandate to:
Expand and improve our outreach to the small business community, and
--Improve the overall management of the Small Business Administration by becoming more customer-driven in the effective and efficient delivery of program services.
(1) Increasing credit availability from $6.4 billion in FY 1993 to $7.0 billion in 1994 and, contingent upon passage of the President's budget, $9.0 billion in FY 1995.
(2) Improving and expanding the loan servicing capability at our Fresno, California Center, to include additional regions; and
(3) Creating a new loan processing center in the Southwest to provide better customer service.
B. Contingent upon passage of the President's FY 1995 budget, create a new loan program for veterans by October 1, 1994, which leverages funds allocated for Vietnam-era and disabled veterans; and provide a Veteran Loan Guaranty Program of $800 million (up from $15 million) for all military veterans.
C. Utilize the Microloan program and the Women's Demonstration Project to increase lending and counselling to currently under-served populations. The SBA would function as a resource partner with the Departments of Labor and Health and Human Services in the Administration's effort to transform the welfare system into a transitional support program that promotes work and responsibility.
D. Focus limited capital resources more wisely on those small businesses that need it the most (e.g. minority and women-owned, rural and inner city companies, veteranowned firms) and those that have the greatest potential to create and maintain jobs and make the United States more competitive in the global market place.
(1) Work with district directors to develop a more focused approach to lending.
(2) Develop a pilot project in Chicago to focus more loans on qualified women-owned businesses. By March 1994, complete a pre-qualification application process to improve our outreach to women-owned businesses and by June 1994, expand the program to five additional cities (Columbus, OH; Albuquerque, NM; Helena, MT; New Orleans, LA; and Charlotte, NC).
(3) Increase capital availability to those industries that are growing and creating jobs. Contingent upon passage of implementing regulations, create as many as 50 additional Small Business Investment Companies in FY 1994 and an additional 100 to 150 over the next two to three years, and focus general business lending on those sectors that are creating and maintaining jobs.
E. Completely revise the working capital loan program with input from the private sector, recognizing that many companies need more than term loans to be successful. Line SBA personnel will be educated in new financial assistance tools and two pilot efforts will be merged into a national program by March 15, 1994.
F. Contingent upon passage of implementing regulations, create a new Small Business Investment Company (SBIC) security to provide incentives to SBICs to make long-term equity investments and leverage more private capital in order to meet the goals of growth, expansion and modernization of small businesses. The new instrument, a participating security, will give the government a share of the profits from successful investments financed with federal funds and should be implemented by October 1994.
G. Significantly reduce documentation requirements related to lending. Reduce the SBA's application form to a minimum, analyzing by February 1994 the success of the pilot project in Region 6 (Texas), which reduces the form to a one-page document. Initiate a Loan Express pilot with several lenders by May 1994, authorizing them to use their own forms. Establish an electronic loan approval pilot process with selected lenders and institute a revised application package that eliminates unnecessary paperwork by June 1994, to include encouraging character loans and pooling loans of a similar type and size.
2. OUTREACH OBJECTIVE: MINORITY ENTERPRISE DEVELOPMENT --EXPAND
OPPORTUNITIES IN POORER RURAL COMMUNITIES AND INNER CITIES
4.MANAGEMENT AND OUTREACH OBJECTIVE: PROVIDE BETTER CUSTOMER SERVICE
(1) Developing and initiating a Five Year Information Strategy Plan to move to an "enterprise computing environment," which offers shared, relational databases; broad electronic inter-connectivity through Local Area Networks and Wide Area Networks; and a framework for improving the SBA's principal functions.
(2) Beginning the replacement of the telecommunications network to improve the flow of data throughout the SBA and initiating the installation of a Wide Area Network.
(3) Replacing those Office of Information Resource Management contracts that are not cost effective with permanent SBA personnel (within existing FTE and dollar constraints).
(4) Beginning the migration from a mainframe computer platform to a client-server, open systems architecture, with single source data entry and relational database technology, and distributed processing.
B. Improve financial management by:
(1) Beginning to develop an integrated core accounting module and beginning the conversion from a mainframe platform to client-server architecture.
(2) Expanding training to manage more effectively, particularly in cost accounting and financial management.
(3) Expanding financial assessments of high risk programs.
(4) Improving asset management by more cost-effective accounting.
C. Improve managerial accountability and create an organization that is driven by results by:
(1) Developing an Agency performance agreement with the President.
(2) Participating as a performance pilot agency to implement the Government Performance and Results Act of 1993 earlier than required by statute.
(3) Instituting a strategic management process that integrates program planning, resource allocation and program oversight into the daily operational management in the Agency.
D. Develop a positive, ongoing, proactive message for the SBA, which is reflected in marketing materials, speeches, presentations and press releases. Through better public communications, the SBA will be able to inform and educate various segments of the public about SBA programs and anticipate and manage crises more effectively. Based on the concept of a "full service" SBA, we will integrate the concept of customer service into our operations, selling the value of the various programs for the customer's business success.
9. MANAGEMENT AND OUTREACH OBJECTIVE: INCREASE FEDERAL
PROCUREMENT OPPORTUNITIES FOR SMALL BUSINESSES IN GENERAL AND WOMEN AND MINORITY-OWNED BUSINESSES IN PARTICULAR
(1) Develop and issue a customer satisfaction survey by March 1, 1994 to determine how the OIG can become more effective in assisting the SBA to improve performance and reduce fraud in Agency programs.
(2) Request Agency program managers to assess the value of OIG activities (i.e., audits, inspections, investigations) at their conclusion.
(3) Include OIG personnel in Agency management reviews.
B. Focus audits and inspections on priority items of interest to the Administrator and Deputy Administrator.
(1) Solicit particular items of interest from Agency policy officials and consider Agency program priorities in formulating the OIG's annual audit and inspection operating plans.
C. Recommend ways to improve program management and to reduce opportunities for fraud, waste and abuse in program delivery.
(1) Look beyond compliance activities for systemic problems in program delivery identified through audits and inspections; require OIG investigators to issue "program vulnerability memoranda" to program managers as a means of formalizing OIG observations; and help program officials identify and develop meaningful performance measures to use in gauging program effectiveness and efficiency.
D. Participate in Agency task forces working on program redesign or management improvement initiatives.
(1) Apply OIG knowledge of program delivery strengths and weaknesses as identified through various OIG oversight activities.
The Office of the Inspector General will carry out the above activities in a way that maintains the independence of the Office of the Inspector General and is fully consistent with the Inspector General Act of 1978, Pub. Law No. 95-452 as amended, 5 U.S.C. App 3.1