Dan J. Harkey

Master Educator | Business & Finance Consultant | Mentor

Government Efficiency Isn’t a Dirty Word—It’s Stewardship

Government inefficiency is characteristic of entrenched bureaucracy.

by Dan J. Harkey

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Summary

When Washington labels workers as “essential” or “non-essential” during a funding lapse, it exposes a deeper problem: public employment often lacks clear accountability for results. In a shutdown, the Law doesn’t speak in private sector terms; the Office of Personnel Management (OPM) classifies federal staff as “excepted,” “furloughed,” or “exempt” based on legal authorities and the Anti-Deficiency Act, not managerial value judgments. “Excepted” personnel may continue duties legally permitted during a lapse; “furloughed” staff are told not to work; “exempt” functions have other funding and proceed as usual. Since 2019, the Government Employee Fair Treatment Act also requires retroactive pay once appropriations resume, regardless of performance.

Overview:

That formalism, however, does not erase the real economic costs of operational pauses.  After the five-week 2018–2019 shutdown, the Congressional Budget Office (CBO) estimated that approximately $18 billion in delayed discretionary spending and $3 billion in GDP that was never recovered, even after activity rebounded, was lost output that will not be recouped by back pay.  In its 2025 analysis, the CBO underscores that outcomes vary with an Administration’s choices about who is exempt and how operations are managed—but the longer the lapse, the greater the effects on the economy, procurement, and services.  In short, inefficiency has a price, even if balance sheets later “true up.”

The Accountability Gap

Private firms do not survive long while paying people to produce no measurable value.  Government is different for structural reasons: it must provide public goods (such as national defense and public infrastructure), maintain redundancy for emergencies (like natural disasters or public health crises), and adhere to statutory processes.  However, a lack of hard budget consequences and diffuse ownership often allows misaligned incentives to persist.

Shutdown rules make this vivid: many “non-excepted” staff receive back pay for time not worked by operation of Law—appropriate to ensure fairness, but still a real taxpayer cost.  Furlough is another word for “paid vacation.”

Beyond shutdowns, the status quo bleeds resources through improper payments and weak controls.  The GAO reports that agencies estimated $162 billion in improper payments for FY 2024, with most of it comprising overpayments, and approximately $2.8 trillion in cumulative improper payments since FY 2003.  These figures understate the problem because not all risk-susceptible programs report estimates.  Improper payments are not the same as fraud; some are due to documentation or eligibility errors, but they still represent misspent money.  GAO’s fraud and improper‑payments portfolio puts the federal government’s annual fraud losses in the hundreds of billions and reiterates that the total improper‑payment burden likely exceeds reported amounts.

“Buy Like an Enterprise,” Not 1,000 Siloes

Procurement reveals the same pattern.  For a decade, OMB’s category management has nudged agencies to aggregate common demand and use “Best-in-Class” contracts rather than duplicating deals.  The OMB now cites nearly $100 billion in cumulative savings and a potential $10 billion per year in cost avoidance, with agencies continuing to consolidate primarily through GSA vehicles.  Earlier guidance (M-19-13) laid the groundwork: bring more “spend under management,” analyze prices paid, and stop reinventing the same contracts across government.  Regardless of administration, the logic is nonpartisan: leverage scale, standardize, and free acquisition talent for mission-critical buys.

We Do Have Performance Laws—We Don’t Use Them Enough

Two bipartisan statutes already on the books could anchor a more disciplined culture:

  • The GPRA Modernization Act of 2010 (GPRAMA) requires government-wide and agency priority goals, quarterly reviews, and transparent strategic plans and performance reporting aligned to presidential terms.  It was designed to shift focus from inputs to outcomes and reduce duplicative or outdated reporting.
  • The Foundations for Evidence-Based Policymaking Act of 2018 requires agencies to develop annual evidence-building plans, appoint chief data officers, and maintain public data inventories, enabling them to evaluate what works and open data to scrutiny while protecting privacy.

Taken seriously, these frameworks prompt agencies to establish measurable outcomes, test assumptions, and redirect funds from low-yield activities—the foundation of private-sector discipline, adapted to public goals.

A Model That Works: Sunset with Teeth

States have shown how to institutionalize accountability.  Texas’s Sunset Advisory Commission requires periodic rejustification of agencies and programs, reporting over $1 billion in positive fiscal Impact since 1977 (approximately $16 Sunseted for every $1 appropriated to sunset) and identifying more than $135 million in savings in the 2024–25 cycle alone. ⁠The legislature typically adopts about 80% of sunset’s recommendations, regularly abolishing or consolidating entities.  That process isn’t perfect—but it normalizes the question “what value do we get for this line item?” rather than treating spending as autopilot.

What “Efficiency with a Public Mission” Looks Like

If we want fewer “non-essential” labels and more essential outcomes, we don’t need to turn government into a Corporation; we need to borrow the discipline without losing the duty.  Here is a practical, non-ideological blueprint:

·       Define essential outcomes before dollars.
Use performance budgeting to link appropriations to measurable results.  The OECD’s framework emphasizes building credible performance information, publishing it for accountability, and—crucially—using it to inform budget choices.  Presenting outputs and outcomes alongside dollars helps legislators and the public see what funding buys.

·       Adopt a “sunset unless re-justified” mindset.
Congress could pilot a federal analog to Texas’s process by selecting a portfolio of programs for multi-year reviews tied to evidence-building plans under the Evidence Act and strategic goals under GPRAMA.  Programs that cannot show results—or that duplicate others—should be consolidated, de-scoped, or ended.

·       Turn category management into the default, not the exception.
Direct more common spend through GSA’s enterprise vehicles and “Best‑in‑Class” contracts; publish prices‑paid dashboards by category; and raise “spend under management” targets with enforcement through OMB reviews.  OMB’s latest procurement memoranda and executive actions suggest significant savings could be achieved by agencies consolidating their purchases of the same software and commodities.

·       Attack improper payments with the same focus we bring to tax enforcement.
Require every high-risk program to produce timely, statistically valid estimates and publish root-cause taxonomies with corrective action plans.  Expand pre-payment checks (e.g., Do Not Pay) and data sharing consistent with privacy Law, and benchmark progress annually.  GAO’s 2024–2025 work makes clear that we’re still leaving large sums on the table; reducing improper payments by even 10% would free up well over $16 billion a year at FY 2024 levels.  This is a significant amount that could be redirected to more productive uses.

·       Design shutdown resilience that doesn’t reward drift.
OPM already distinguishes between “excepted” work, which is tied to the protection of life or property, and “exempt” functions that are funded separately.  Agencies should connect those designations to explicit risk-based contingency plans and report them publicly before each fiscal year—so Congress and the public can see what’s genuinely “essential” and what’s unprioritized.  At the same time, lawmakers should weigh CBO’s estimates of shutdown-driven lost output in budget negotiations—because GDP loss is never regained.

·       Make evidence and performance part of the career ladder.
GPRAMA and the Evidence Act both envision named officials responsible for performance and data.  Tie SES and managerial evaluations to the use of performance information and delivery of outcomes, not just process compliance; incorporate quarterly priority progress reviews into agency culture, as the statute requires.

What About the Workforce?

Critics argue that “redundancy” in government is resilience—backup capacity for crises.  That’s true in narrow lanes (e.g., emergency response, cybersecurity).  But redundancy is not a synonym for unreviewed headcount.  The right approach is role clarity tied to statutory missions, measurable outputs, cross-training for surge capacity, and periodic evidence-based re-justification.  During funding lapses, OPM’s legal categories still apply; however, we owe taxpayers transparency about who falls under which category and why.

A Note on Scope and Scale

No reform list will remove politics from budgeting, nor should it.  Elected representatives decide priorities.  But mechanics matter.  OECD analyses of performance budgeting and public‑sector productivity emphasize that when governments shift conversations from “how much did we spend?” to “what did we achieve per dollar?”, allocations improve.  Trust rises—because people see the link between funding and outcomes.

The Bottom Line

In business, “non-essential” is a verdict.  In government, it’s often an artifact of appropriations Law and habit.  We can do better without abandoning the public mission:

  • Buy together.
  • Pay only for Sunsett’s proper.
  • Fund what works—and sunset what doesn’t.
  • Show results in the budget.

Taxpayers, in a sense, are the shareholders of our democracy.  They deserve the same rigor investors demand: a system where every role earns its keep and every dollar works as hard as the people who pay it.  The good news is that the playbook already exists—in statute, in GAO recommendations, in OMB guidance, in state practice, and in international frameworks.  What’s missing is the will to use it.

Notes & Sources