Steve Kelman suggests that providing incentives would inspire frugality and innovation.
Jim Tisdale, a smart, dedicated contracting legal advisor at an Air Force base in Los Angeles, often sends me emails commenting on my blog posts, asking my opinion on contracting developments, or sharing his thoughts. It's always a pleasure to hear from him.
The other day, responding to something I had sent him, he shared with me a cost-savings idea for the government that, with his permission, I am sharing in this post.
The idea is a simple one. When a federal employees travel, they can use negotiated rates the government has set up with local hotels, that are all priced under the government per diem. (These hotel discounts are not contracts with the government, and have no minimum order to obtain the rate.) Jim's idea is that employees who can get a lower rate on a hotel -- say, through Priceline -- they should be able to keep half the difference between the published negotiated rate and the rate the employee pays.
I suggested an additional tweak on this to Jim, which he endorsed -- that if the employee bills the government for less than the maximum per diem for meals, the employee similarly be able to keep half the difference.
I raise Jim's example for a bunch of reasons. First, while this proposal would make only the smallest of impacts on the deficit, the cost to the government of getting these savings is zero -- it's pure deficit reduction. Second, I like the idea of putting this cost-saving activity in the hands of employees, because once they start helping save money, it gets them in the spirit to make other efforts as well. Third, Jim's cost-savings idea nicely reflects the cost-saving elements of the contracting culture, which I have urged many times be brought to the fore in the current fiscal environment.
I wonder if anybody can suggest other similar share-in-savings ideas for federal employees. Like all share-in-savings approaches, you need a baseline, and you need to make sure that you don't save money just by making performance worth -- the beauty of Jim's idea is that it passes both of those tests. Feds and others, more suggestions?