As recently as three years ago, plenty of people in Washington, DC wondered why the General Services Administration (GSA) still existed. The agency, created in 1949, is a bureaucracy designed to do business with other bureaucracies. It provides office space, products, and services to other federal agencies -- more than $50 billion worth of goods and services per year. So, until quite recently, GSA seemed bloated (it had 15,600 employees in 1996) and mired in red tape.

Enter Dave Barram. President Clinton named Barram, now 55, to run the agency in 1996. Barram was hardly a Washington neophyte: He'd served as deputy secretary and COO of the Department of Commerce. But he wasn't a Beltway bandit either -- which was a big part of his appeal. Barram had spent 24 years in Silicon Valley, at firms such as Hewlett-Packard and Apple. His mission at GSA was to take what he had learned on the cutting edge of business and apply it to one of the most old-fashioned agencies in the federal government. "Any organization has to be in a constant state of reinvention, or it's all over," says Barram.

GSA's scope is extraordinary. Martha Johnson, 46, chief of staff, describes the agency as a combination of Office Depot, Home Depot, an airline, and a real-estate agency. (Before joining the government, Johnson was an internal consultant at Ben & Jerry's.) And that extraordinary scope meant that the challenges of change were extraordinary as well. But in just three years, real change has taken hold. Most of that change involves providing better customer service, fixing the agency's reputation, or improving life for employees. And nearly all of it involves leveraging technology.

The new rule for great service at GSA: Open systems beat closed systems. In other words, if the Staples down the street offers a great deal on office supplies, then agencies are free to buy their supplies there. "If we're good, use us," Barram says. "If we're not, don't. We should exist only if we provide services for our customers at the best value."

GSA has figured out ways to use its clout to get great deals. Its City-Pairs program gets federal employees a 68% discount on airline coach fares, and it has driven down long-distance phone rates to four cents a minute. "It's getting to the point where we no longer audit phone bills," says Johnson. "The time it takes to figure out if someone called Mom on a government phone isn't worth the trouble."

But Barram says that GSA's goal isn't just to lower prices -- it's also to "thrill" customers: "We want our customers to wake up each morning and think, 'Boy, am I glad that GSA exists!' " How does a huge government agency develop a service mentality? By finding role models outside of government. Which is why six senior GSA executives convened a meeting with representatives from Starbucks, Nordstrom, and other companies known for their service. The result was a booklet, called "Thrilling the Customer," that was distributed throughout GSA. Among the agency's other efforts to thrill customers: GSA Advantage!, a Web-based shopping resource that offers more than half a million products online.

Doing better for customers is one huge imperative, Barram says. But another part of his job involves helping GSA acknowledge its success -- by celebrating progress instead of despairing about budget cuts or criticism. "You have to market yourself," he says, "to listen for positive stories and to retell them." After all, there's a lot of good news to market.

Now comes the hard part: encouraging people at all levels to embrace risk instead of avoiding it. "If you're not making some mistakes, you're not pushing the envelope," says Barram. One type of risk that Barram has championed involves switching jobs without leaving GSA. In the past three years, more than half of the agency's senior executives have changed jobs. Legal-affairs experts are running major divisions; there's a finance expert working in IT. "When a couple of the early moves occurred, they involved some of the best people in the entire organization, and everyone else said, 'Whoa!' " Barram notes. "That really shook things up."

Another way to shake things up is to encourage candor -- not exactly a trait that Washington is famous for. To that end, GSA has set up a Web-based "chat line," in which employees exchange uncensored thoughts and ideas. "If we have honest conversations about what's working and what isn't, we can become really good," Barram says. "If we don't, we'll never help each other."

You can contact Dave Barram (dave.barram@gsa.gov) and Martha Johnson (martha.johnson@gsa.gov) by email.

Sidebar: They've Mastered Change

For Carlotta Leigh, a personnel assistant who's been at GSA for eight years, staff meetings used to mean frustration: "People were talking over my head. I'd never have much to offer."