Most change-minded businesspeople who look at Washington shake their heads and ask, "Why can't government run more like a business?" Most change-minded businesspeople who look at their own situations shake their heads and ask, "Why can't we convince headquarters to leave us alone to operate the way we want to?" The Mint understood that having a good answer to the first question would mean having to make progress on the second.
Enter John Mitchell and Coleen Vogel. Mitchell is the Mint's superenergized, behind-the-scenes ace in the hole for dealing with meddlesome bureaucracies. Mitchell, 44, deputy director of the Mint, was acting deputy CFO at the Treasury Department before coming to the Mint to work with Philip Diehl. His call to arms? To help the Mint run like a business by changing the laws that stand in the way.
"We have an unusual situation by design," he says. "We're a pretty creative agency inside the Treasury Department, which is a justifiably conservative agency with critical economic missions to accomplish. We're constantly asking ourselves: 'Why is this necessary? Why can't we do this? Let us try it that way.' So we have to make sure that behind every change we preach to Congress, there's an ironclad, indisputable business case. It's easy for people to assume that just because you're doing lots of creative things and taking risks, that everyone will love you. But not everyone loves it when you challenge the status quo."
The biggest challenge to the status quo came in 1995, shortly after Diehl took over as director. The Mint persuaded Congress to unshackle it from annual government appropriations and transform it into a Public Enterprise Fund, which would be financed not from Congress but from its own profits. The reason? The realities of power in Washington: The less money you take from Congress, the more flexibility you have to compete in the marketplace. "We were given the freedom to run our organization like a real business. And like a real business, we were held accountable for our failures as well as our successes," says Mitchell. Indeed, the Mint has received the broadest exemptions from standard procurement rules of any federal agency.
That one legislative change made Coleen Vogel's life much easier. Vogel, 33, the Mint's assistant director for procurement, joined the agency nine years ago after doing construction and contracting for the air force. She knows virtually every rule and regulation in the 1,500-page Federal Acquisition Regulation book — the ultimate symbol of standard operating procedures that produce substandard results. Vogel can regale a visitor for hours, talking about IFBs (invitations for bids), RFPs (requests for proposals), JFOTFOCs (justifications for other than full and open competition) — all steps in Washington's arduous procurement process.
But over the past few years, Vogel has used the Mint's new freedom to create radically new ways to purchase the $700 million in goods and services that the Mint requires each year. She's turned a 1,500-page bible into a 5-page guide for newfangled procurement practices. "We went through all 52 chapters of FAR and kept the things that made business sense," she says. "We dumped everything else." As a result, Vogel and her team reduced procurement lead time for complex deals (those worth more than $100,000) from 9 months to 2 months. If something big is an urgent priority, Vogel and her colleagues can do the deal in a week. For run-of-the-mill purchases, she's brought the lead time down from 10 days to 3. Contracts with metal suppliers now get negotiated in 1 day as opposed to 40.
The Mint recently flexed its new procurement muscle for two major purchases: a multimillion-dollar ERP (enterprise resource planning) system — the first in a public-sector organization — and the negotiation, purchase, and construction of a new headquarters in downtown Washington, DC. The building-acquisition process took just 3 years from start to finish. As Vogel points out, the Secret Service's new building, down the street from where the Mint's new headquarters will be, which was developed through the General Services Administration (GSA), has taken more than a decade. "We were able to negotiate a 40-year lease for a below-market rate in a part of town that is surging," says Vogel. "A few years ago, we would have accepted whatever GSA gave us. We never would have dreamt that we could do something like this."
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