Government Cost Reduction Act

Government Cost Reduction Act - Title I: General Provisions - Declares that the purpose of this Act is to reduce the costs of Government to the taxpayers and to improve Government productivity.

Title II: Agency Program Appraisal - Requires the head of each Executive agency to: (1) classify its activities into programs and identify each program under its jurisdiction; (2) set forth long term goals of each such program; and (3) review and revise, if appropriate, program categories and goals at least every four years.

Directs each agency head: (1) to provide for the collection and analysis of information necessary for the evaluation of each program and of the agency's success in reducing program costs; and (2) to develop program performance indicators based on the annual and long-term goals of the program and the annual cost-reduction objectives for the program.

Requires each agency head to submit to the President for each fiscal year a management improvement plan. Directs the President to review such plans and establish annual program goals and cost-reduction objectives for the fiscal year for each agency and each designated program having the greatest need for improved management. Requires each agency to modify its management plan as necessary, implement such plan, and report on its success in meeting program and cost-reduction objectives to the President and the Office of Personnel Management (OPM). Directs the President to rate the success of each agency in meeting its objectives and of each designated program according to a system to be established by OPM. Requires each agency head to rate each agency program. Directs each agency to provide for employee participation in the development of management improvement plans.

Authorizes the OPM to adjust, within specified limits, the amount of benefits (including merit pay increases, cash awards, and promotions) available during a fiscal year to employees within a program on the basis of the program rating for the preceding year.

Title III: Cost Savings - Defines the term "cost savings" as an amount which is budgeted but not spent for an agency program because of improvements in program management or operation, provided that the savings do not adversely affect the attainment of annual or long-term program goals or generate additional costs later.

Permits any agency to report program savings to the President and request the President to designate them as cost savings. Directs the President to review and verify such savings and to determine the amount of such savings which qualifies as cost savings. Declares that 50 percent of any cost savings shall be returned to the U.S. Treasury, ten percent shall be available to the agency for employee benefits, and the remainder shall be available to the agency for any authorized purpose.

Title IV: Work Force Planning - Requires each agency to develop by October 1, 1985, a work force planning system capable of determining personnel requirements for all agency programs according to an implementation schedule and guidelines prescribed by OPM. Directs each agency to test the system, make necessary modifications, and apply to OPM for certification of the system by October 1, 1986. Directs agencies to use data derived from such systems to formulate requests, reallocate personnel, and determine whether to have work performed by contract. Requires the Director of the Office of Management and Budget (OMB) to report to Congress on its use of such data to formulate budget requests. Requires the Director of OPM to conduct and prepare project evaluations for demonstration projects using certified work force planning systems.

Title V: Cost Accounting and Productivity Measurement Cost Accounting Systems - Requires each agency, by October 1, 1985, to establish a cost accounting system to determine the per-unit cost of output of each program and to provide a basis for allocating the indirect cost among agency programs. Directs the Comptroller General to prescribe regulations to standardize such systems.

Requires the Director of OPM: (1) to establish a productivity measurement system to contain productivity data submitted by each agency; (2) to develop an index of such data; and (3) to provide such index to the Director of the General Services Administration for entry into the Federal Information Locator.

Transfers to the Director of OPM all functions of the Secretary of Labor pertaining to the measurement of the productivity of agencies which are carried out by the Bureau of Labor Statistics. Requires the Director to submit to the President and Congress an annual productivity report including: (1) a measure of the productivity of Government overall and of each agency program; (2) comparisons of the productivity of ways to improve Government productivity. Requires the Director to provide for a clearinghouse for information on productivity improvement programs.

Requires the Director to encourage agencies to develop procedures for increasing employee participation in decisions affecting program administration.

Title VI: Capital Investment Funds - Authorizes the Director of OMB to establish special accounts to finance capital improvement projects which: (1) require expenditures of less than $100,000; and (2) will generate cost savings at least equal to the project expenditures within four years after completion. Sets forth criteria for the approval by each agency head of project proposals. Requires designated agency employees to review and report to the agency head on the data supporting the projected cost savings and productivity improvements of each proposed project. Directs the agencies to monitor the projects and report to OMB on whether the cost savings and productivity improvements of funded projects match original projections.

Title VII: Additional Incentives for Increased Productivity - Directs OPM to prescribe regulations which permit agencies to institute involuntary separations to meet reduced labor requirements caused by improved productivity only if alternative methods of responding to a reduced work load have failed. Applies grade retention provisions to any employee in a civilian supervisory position which is reduced in grade because of personnel reductions caused by productivity improvements.

Requires the contributions of a Federal employee or a senior executive toward the attainment of annual program and cost-reduction objectives to be considered in his or her performance evaluation. Requires performance appraisal periods to be coterminous with the fiscal year.

Directs OMB to prescribe regulations permitting agency employees to demonstrate that agency work to be performed by contract could be performed as efficiently and effectively by agency employees.

Authorizes the Inspector General of any agency to pay a cash award to an employee whose disclosure of waste or fraud resulted in cost savings.

Title VIII: Miscellaneous Provisions - Directs the President to review the functions of OPM and OMB under this Act and to transfer any functions the President determines would be performed better by the other agency.

Restricts the use of contracted services to carry out this Act.