FY 2005 FEDERAL MARITIME COMMISSION 

 1 

FEDERAL MARITIME COMMISSION 

PERFORMANCE AND 

ACCOUNTABILITY REPORT 

FISCAL YEAR 

2005 
 2 

 Management’s Discussion and Analysis FY 2005 

VISION 

 

Fairness and Efficiency in U.S. Maritime Commerce 

 

 

 

 

 

MISSION 

The FMC’s Mission is to : 

 

• Develop and administer policies and regulations 

that foster a fair, efficient and secure maritime 

transportation system;

• Protect U.S. maritime commerce from unfair 

foreign trade practices and market-distorting 

activities; 

 

• Facilitate compliance with U.S. shipping statutes 

through outreach and oversight; 

 

• Assist in resolving disputes. 

 

 

 
 FY 2005 FEDERAL MARITIME COMMISSION 

 3 

This Fiscal Year 2005 Performance and Accountability Report 

is published by the 

Federal Maritime Commission. 

An electronic version of this report can be found at 

http://www.fmc.gov. 

Please refer any questions concerning this report to the 

Federal Maritime Commission at 

(202) 523-5800. 

Published in Washington, DC 

November 15, 2005 
 4 

 Management’s Discussion and Analysis FY 2005 

The Federal Managers’ Financial Integrity Act of 1982 requires continuous evaluations and reporting of the adequacy 

of the systems of internal accounting and administrative controls. The Act can be found at the following URL: 

http://www.whitehouse.gov/omb/financial/fmfia1982.html 

The Chief Financial Officers Act of 1990 provides for the production and submission of complete, reliable, timely, and consistent 

financial information for the use of the Executive Branch of the government and the Congress in the financing, management and 

evaluation of federal programs. The Act can be found at the following URL: 

http://www.gao.gov/special.pubs/af12194.pdf 

The Reports Consolidation Act of 2000 authorizes agencies to consolidate several reports in order to provide performance, 

financial and other related information in a more useful manner. The Act can be found at the following URL: 

http://www.cbo.gov/showdoc.cfm?index=2193&sequence=0 

The Federal Financial Management Improvement Act of 1996 requires the assessment of financial systems to ensure they adhere 

to government -wide financial requirements. The Act can be found at the following URL: 

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=104_cong_public_laws&docid=f:pub1208.104.pdf 

The Inspectors General Act of 1978 (amended) requires that the inspector general make available information on management 

actions taken in response to IG audits. The Act can be found at the following URL: 

http://www.access.gpo.gov/uscode/title5a/5a_2_.html 

The Government Performance and Results Act of 1993 requires an annual report that measures the performance results of the 

agency against the established agency goals. The Act can be found at the following URL: 

http://www.whitehouse.gov/omb/mgmt-gpra/gplaw2m.html 

The Government Management Reform Act of 1994 requires the submission of audited financial statements. The Act can be found 

at the following URL: 

http://govinfo.library.unt.edu/npr/library/misc/s2170.html 

The Federal Maritime Commission’s (FMC) Performance and Accountability Report (PAR) 

provides program and financial information that enables the President, Congress, and the 

public to assess the performance of the agency relative to its mission and the resources 

entrusted to it. This PAR satisfies the following legislation: 
 FY 2005 FEDERAL MARITIME COMMISSION 

 5 

 TABLE OF CONTENTS 

 

 

 

 A Message From the Chairman 1 

 Chapter One: Management’s Discussion and Analysis 

 

 Introduction 2 

 Regulatory Responsibility 3 

 Future Challenges 4 

 Program Performance Overview 5 

 President’s Management Agenda 5 

 Financial Performance Overview 6 

 Financial Statement Highlights 8 

 Improper Payments Information Act 11 

 Systems, Controls, and Legal Compliance 13 

 

 Chapter Two: Program Performance 15 

 

 Introduction 16 

 

 Program Activities: 16

 Formal Proceedings Program: 

 Office of the Commissioners 17 

 Office of the Secretary 17 

 Office of Consumer Affairs and Dispute Resolution Services 18 

 Office of the General Counsel 18 

 Office of Administrative Law Judges 19 

 Inspector General Program 20 

 

 Equal Employment Opportunity Program 20 

 

 Operations Program: 21 

 Office of Operations 21 

 Bureau of Enforcement 22 

 Bureau of Trade Analysis 23 

 Bureau of Certification and Licensing 26 

 

 Administration Program: 

 Office of the Director 28

Office of Budget and Financial Management 29 

 Office of Human Resources 30 

 Office of Information Technology 30 

 Office of Management Services 31 

 Annual Performance Report 32 

 Addressing the President’s Management Agenda 41 

 

 FY2005 Federal Maritime Commission 
 6 

 Management’s Discussion and Analysis FY 2005 

 TABLE OF CONTENTS 

Chapter Three: Auditors’ Report and Financial Statements: 

 

 A Message From the Chief Financial Officer 43 

 Limitations of the Financial Statements 44 

 Independent Auditor’s Report 45 

 Independent Auditor’s Report on Compliance with Laws and Regulations 47 

 Independent Auditor’s Report on Internal Controls 49 

 Balance Sheets 51 

 Statements of Net Cost 52 

 Statements of Changes in Net Position 53

 Statements of Budgetary Resources 54

 Statements of Financing 55 

 Statements of Custodial Activity 56 

 Notes to the Financial Statements 57

 Appendix A Inspector General’s Assessment of the Most Serious 

 Management Challenges Facing the FMC 69 

 Appendix B Actions to Address the FMC’s Management Challenges 72 

 Appendix C Management Decisions and Final Actions on OIG 

 Audit Recommendations 73 

 Appendix D FMC Organization Chart 75 

 Appendix E Annual Performance Plan (Revised) 2005 76 

 Appendix F Glossary of Acronyms 97 
 FY 2005 FEDERAL MARITIME COMMISSION 

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FEDERAL MARITIME COMMISSION

MANAGEMENT’S DISCUSSION and ANALYSIS 

Fiscal Year 2005 
 1 

 Management’s Discussion and Analysis FY 2005 

A MESSAGE FROM THE CHAIRMAN 

It is my pleasure to present the Federal Maritime Commission’s 

Performance and Accountability Report for FY 2005. As a 

transportation/trade regulatory agency, our Vision is to ensure fairness and 

efficiency in U.S. maritime commerce. Our mandate is to help remove 

impediments to fair competition - undue controls, influences or non-market 

barriers imposed by any nation, carrier, cargo owner or intermediary - which 

can adversely affect U.S. oceanborne trade. We have developed a regulatory 

system that allows for necessary oversight with minimal disruption to the 

efficient flow of U.S. imports and exports. Thus, we ensure that fair 

competition exists in the ocean transportation industry while allowing the 

industry to conduct business as efficiently as possible. 

I am pleased to report that the FMC has achieved virtually all of its performance goals, and is positioning its 

resources with greater precision and effectiveness in order to continue to achieve its mandate within budget 

resources. In FY 2005, the FMC placed a major emphasis on furthering its interactions with external parties to 

increase the value of its services and oversight operations. We also strengthened relationships with government 

agencies responsible for maritime security to facilitate mutual efforts to identify and address potential security 

threats. Further, we improved our communication with agency stakeholders to increase public awareness of agency 

programs and policies, and to help address concerns before they become problems. We also improved the 

management of information by utilizing technology to streamline the flow of information, and to create more 

sophisticated databases. 

One of my responsibilities as the chief administrative officer of the agency is to ensure that our resources are 

efficiently managed and effectively used. This report provides information which demonstrates the judicious 

management of funds, and describes our successes in implementing our strategic goals. In addition, the FMC has 

evaluated its management controls and financial management systems, as required by the Federal Managers’ 

Financial Integrity Act, and I can certify, with reasonable assurance, that the Commission is in compliance with the 

provisions of that Act. 

The FMC is committed to developing and administering policies and regulations that foster a fair, efficient and 

secure maritime transportation system, to protecting U.S. maritime commerce from unfair foreign trade practices 

and market-distorting activities, to facilitating compliance with U.S. shipping statutes through outreach and 

oversight, and to assisting in resolving disputes. The FMC is proud of its FY 2005 accomplishments and looks 

forward to providing high-quality service to the American public in future years. 

Sincerely, 

Steven R. Blust 

Chairman, Federal Maritime Commission 

MANAGEMENT’S DISCUSSION & ANALYSIS 
 FY 2005 FEDERAL MARITIME COMMISSION 

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Chapter One 

 MANAGEMENT’S DISCUSSION and ANALYSIS 

Introduction 

This Performance and Accountability Report represents the completion of the Federal Maritime Commission’s 

(“FMC” or “Commission”) program and financing management process for Fiscal Year 2005, which began with 

mission and program planning, continued with the formulation and justification of FMC’s budget submission to the 

President and Congress, through budget execution, and ended with a report of our program performance and the 

use of resources. This report was prepared pursuant to the requirements of the Chief Financial Officers Act, as 

amended by the Reports Consolidation Act, and OMB Circular No-A136 (Revised), and covers the Commission’s 

activities from October 1, 2004, through September 30, 2005. 

Chapter 1, our Management’s Discussion and Analysis, provides an overview of the FMC. It consists of nine 

sections: Introduction describes the agency, its mission and structure; Regulatory Responsibility describes its 

regulatory mandate; Future Challenges includes information about the changes in the maritime industry; Program 

Performance Overview reports on the FMC’s success in achieving its strategic goals; President’s Management 

Agenda describes activities related to the relevant initiatives; Financial Performance Overview discusses the 

FMC’s financial position and audit results; Financial Statement Highlights gives an overview of the major 

financial statements; Improper Payments Information Act provides a breakdown of any improper payments made 

by the agency and efforts to collect improper disbursements; and Systems, Controls, and Legal Compliance

discloses the FMC’s compliance with certain legal and regulatory requirements. 

About the FMC 

The FMC is an independent regulatory agency which administers the Shipping Act of 1984 (“1984 Act” or 

“Shipping Act”) as amended by the Ocean Shipping Reform Act of 1998 (“OSRA”); section 19 of the Merchant 

Marine Act, 1920 (“1920 Act”); the Foreign Shipping Practices Act of 1988 (“FSPA”); and Public Law (“P.L.”) 

89-777 (passenger vessel certification). The Commission: monitors the activities of ocean common carriers, marine 

terminal operators, conferences, ports and ocean transportation intermediaries (non - vessel - operating common 

carriers and ocean freight forwarders) who operate in the U. S. foreign commerce to ensure they maintain just and 

reasonable practices; maintains a trade monitoring and enforcement program designed to assist regulated entities in 

achieving compliance and to detect and appropriately remedy malpractices and violations of the prohibited acts set 

forth in section 10 of the 1984 Act; monitors the laws and practices of foreign governments which could have a 

discriminatory or otherwise adverse impact on shipping conditions in U. S. trades, and imposes remedial action as 

appropriate pursuant to section 19 of the 1920 Act or FSPA; enforces special regulatory requirements applicable to 

carriers owned or controlled by foreign governments; processes and reviews agreements and service contracts 

pursuant to the 1984 Act for compliance with statutory requirements; and reviews common carriers’ privately 

published tariff systems for accessibility and accuracy as required by OSRA. The Commission also issues licenses 

to qualified ocean transportation intermediaries in the U. S., ensures that all ocean transportation intermediaries 

(“OTIs”) are bonded or maintain other evidence of financial responsibility, and ensures that passenger vessel 

operators demonstrate adequate financial responsibility in case of nonperformance or injury to passengers. 

Organization 

The FMC is composed of five Commissioners appointed for five-year terms by the President with the advice and 

consent of the Senate. No more than three members of the FMC may belong to the same political party. The 

President designates one of the Commissioners to serve as Chairman. The Chairman is the chief executive and 

administrative officer of the agency. The FMC’s organizational units consist of: Offices of the Commissioners; 

Office of the General Counsel (“OGC”); Office of the Secretary (“OS”), including the Library and Office of 

Consumer Affairs and Dispute Resolution Services (“CADRS”); Office of Administrative Law Judges (“ALJ”); 

Office of Equal Employment Opportunity (“EEO”); Office of the Inspector General (“OIG”); Office of Operations 

(“OPS”), including the Bureaus of Certification and Licensing (“BCL”), Enforcement (“BOE”), and Trade 

Analysis (“BTA”); and Office of Administration (“OA”), including the Offices of Budget and Financial 

Management (“OBFM”), Human Resources (“OHR”), Information Technology (“OIT”), and Management 

Services (“OMS”). The majority of FMC personnel are located in Washington, DC., with Area Representatives in 

New York, New Orleans, Los Angeles, Seattle, and South Florida. 

In FY 2005, the FMC’s appropriation totaled $19,340,032 with 124 full-time-equivalent staff. 
 3 

 Management’s Discussion and Analysis FY 2005 

Chapter One 

 MANAGEMENT’S DISCUSSION and ANALYSIS 

Regulatory Responsibility 

The FMC’s regulatory responsibilities include: 

• Protecting shippers and carriers engaged in the foreign commerce of the U.S. from 

restrictive or unfair foreign laws, regulations, or business practices that harm U.S. 

shipping interests or ocean trade. 

• Reviewing operational and pricing agreements among ocean common carriers and marine 

terminal operators (“MTOs”), to ensure that they do not have excessively anticompetitive 

effects. 

• Reviewing and maintaining a system containing the service contracts between ocean 

common carriers and shippers, and service arrangements between non-vessel-operating 

common carriers (“NVOCCs”) and shippers, and using this system to guard against 

anticompetitive practices and other unfair prohibited acts. 

• Ensuring that common carriers’ rates and charges are accessible to the shipping public in 

private, electronically accessible systems. 

• Regulating rates, charges, and rules of government-owned or -controlled carriers to ensure 

 that they are just and reasonable and are not unfairly undercutting private competitors. 

• Issuing passenger vessel certificates evidencing financial responsibility of vessel owners or 

charters to pay judgments for personal injury or death or to repay fares for the 

 nonperformance of a voyage or cruise. 

• Licensing OTIs to protect the public from unqualified, insolvent, or dishonest companies. 

 

• Ensuring that OTIs maintain sufficient financial responsibility to protect the shipping 

public from financial loss. 

• Investigating discriminatory rates, charges, classifications, and practices of common 

carriers, MTOs, and OTIs operating in the foreign commerce of the U.S. 

The FMC is authorized by the FSPA, section 19 of the 1920 Act, and section 13(b)(6) of the 1984 Act, to take 

action to ensure that the foreign commerce of the U.S. is not burdened by non-market barriers to ocean shipping. 

The FMC may take countervailing action to correct unfavorable shipping conditions in U.S. foreign commerce and 

may impose penalties. The FMC may address actions by carriers or foreign governments that adversely affect 

shipping in the U.S. foreign oceanborne trades including the intermodal operations of carriers or the operations of 

OTIs, or that impair access of U.S.-flag vessels to ocean trade between foreign ports. 

The 1984 Act is applicable to the operations of common carriers and other persons engaged in U.S. foreign 

commerce. It exempts agreements that have become effective under the 1984 Act from the U.S. antitrust laws, as 

contained in the Sherman and Clayton Acts. The FMC reviews and evaluates agreements to ensure that they do 

not exploit the grant of antitrust immunity, and to ensure that agreements do not otherwise violate the 1984 Act or 

result in an unreasonable increase in transportation cost or unreasonable reduction in service. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 4 

Regulatory Responsibility (continued) 

In addition to monitoring relationships among carriers, the FMC is also responsible for ensuring that individual 

carriers, as well as those permitted by agreement to act in concert, fairly treat shippers and other members of the 

shipping public, in accordance with the 1984 Act’s prohibition against undue discrimination. The 1984 Act also 

requires all carriers to make their rates, charges and practices available in automated tariff systems that must be 

available electronically to the public. NVOCCs may assess the rates and charges published in their tariffs or may 

offer service arrangements with shipping customers. Ocean common carriers are permitted to enter into service 

contracts with their shipper customers. Such contracts are filed electronically with the FMC in our Internet-based 

system, and are provided confidential treatment by the FMC as required by the Act. The FMC does not have the 

authority to approve or disapprove general rate increases (“GRIs”) or individual commodity rate levels in the U.S. 

foreign commerce, except with regard to certain foreign government-owned or -controlled carriers. 

P. L. 89-777 requires the operators of passenger vessels with 50 or more berths who embark passengers at U.S. 

ports to establish financial coverage to indemnify passengers in cases of death, injury, or nonperformance of 

transportation. The FMC certifies such operators upon the submission of satisfactory evidence of financial 

responsibility. The FMC ensures that all OTIs operating in the foreign commerce of the U.S. have established 

sufficient financial responsibility to protect shippers from financial loss. Additionally, the FMC licenses all U.S. 

OTIs. 

The FMC carries out its regulatory responsibilities by conducting informal and formal investigations. It holds 

hearings, considers evidence and renders decisions, and issues appropriate orders and implementing regulations. 

The FMC also adjudicates and mediates disputes involving the regulated community, the general shipping public, 

and other affected individuals or interest groups. 

The FMC also carries out a management and support function for information technology, financial management, 

human resources, and administrative support. 

The FMC oversees approximately 5,200 regulated persons (passenger vessel operators, conferences, OTIs, 

NVOCCs, etc.). 

The FMC has a new, improved, easy-to-navigate website which contains more information concerning the 

agency’s activities and responsibilities. Please visit us at www.fmc.gov. 

Future Challenges 

International trade remains dependent upon an efficient ocean transportation system. Yet the ocean shipping 

industry’s business processes and security requirements have undergone significant changes in recent years. The 

industry continues to face challenges related to port and maritime security, port congestion, industry consolidation 

and dynamic economic conditions. As the industry restructures to adapt to these changes, it is imperative for the 

FMC to ensure that its oversight produces a competitive trading environment in U.S. ocean commerce that is in 

harmony with, and responsive to, international shipping practices, and encourages fair and open commerce. 

The Commission has launched a comprehensive review of its regulatory initiatives to ensure that agency resources 

are utilized in a manner best suited to accomplish statutory obligations with a minimum of government 

intervention and regulatory cost. In addition, cooperative working arrangements with front-line security agencies 

remain in place. Effective use of emerging information technologies continues to facilitate our efforts. 

Chapter One 

 

 MANAGEMENT’S DISCUSSION and ANALYSIS 
 5 

 Management’s Discussion and Analysis FY 2005 

Program Performance Overview 

The FMC, like other Federal agencies, provides an annual performance plan to Congress, pursuant to the 

Government Performance and Results Act (“GPRA”). The FMC has organized its performance goals to achieve its 

strategic goals. The FMC’s FY 2003-FY 2008 Strategic Plan is available on the FMC’s website. The complete FY 

2005 Program Performance Report is contained in Chapter 2, Program Performance. Briefly, in FY2005, the 

Commission focused on furthering its interactions with external parties to increase the value of its services and 

oversight operations, and on strengthening relationships with government agencies responsible for maritime 

security to facilitate mutual efforts to identify and address potential security threats. This includes improving 

communication with the media, industry representatives, and other stakeholders to increase public awareness of 

Commission programs and policies, and to help address concerns before they become problems. In addition, we 

broadened our efforts to implement the President’s Management Initiative to expand electronic government. We 

improved the management of information by utilizing technology to streamline and simplify the delivery of 

services and information to regulated entities, other government agencies, and the public, and we created more 

sophisticated databases to allow staff to more effectively identify regulated activities, complaints, and potential 

abuses. Also, we implemented an IT Capital Planning Investment Control Process for the agency’s major IT 

investments. Overall, we are pleased with the success we achieved in addressing our stated goals and objectives.

Achieving Strategic Goal Results 

The FMC has a distinct process for measuring performance. Performance goals are developed to promote one of 

the FMC’s strategic goals, and the processes or activities required to achieve the goals are identified. The agency 

then specifies the outcomes it believes will result from accomplishing each stated goal, and agrees on performance 

indicators as the quantifiers of performance. Finally, performance measures are established for evaluation of 

achievement of performance goals. Taken together, performance goals under each strategic goal are designed to 

enhance and further those goals each fiscal year, bringing the agency closer to its ideal of full achievement of its 

strategic goals. 

President’s Management Agenda 

The President’s Management Agenda is intended to make Government more citizen-centered, results-oriented, and 

market-based. The five initiatives are: 1) Strategic Management of Human Capital; 2) Competitive Sourcing; 3) 

Improved Financial Management, 4) Expanded E-Government, and 5) Budget and Performance Integration. The 

FMC has achieved some successes in its agenda to address these initiatives. Chapter 2, Program Performance,

discusses our activities in these important areas in more detail. 

A brief overview of the agency’s successes includes the following. 

Strategic Management of Human Capital – In FY 2004, the FMC implemented a realignment which has improved 

operations and provides a framework for the agency to more efficiently and effectively implement the agency’s 

strategic goals. We continue to assess our realignment to ensure that we are structured to achieve optimal 

effectiveness. We also began a wholesale review of our performance management system to ensure that it is a 

viable tool for enhancing skills, guiding career development, and assessing agency and employee progress. The 

agency also offers a range of flexible work options and employee-friendly and family-friendly programs and 

policies. Managers are encouraged to review their staff’s critical skills and to target training to improve expertise. 

Budget and Performance Integration - The FMC made completing budget and performance integration a key 

performance goal in FY 2005, and was successful in achieving it. In FY 2005, we also began an agencywide 

assessment of our strengths, weaknesses, opportunities and threats to assist us in identifying our initiatives and 

priorities for the future, along with the resources necessary for successful operations. The Strategic Plan and 

Annual Performance Plan continue to represent the fundamental framework for the agency’s planning and 

budgeting activities. 

Chapter One 

 

 MANAGEMENT’S DISCUSSION and ANALYSIS 
 FY 2005 FEDERAL MARITIME COMMISSION 

 6 

Chapter One 

 

 MANAGEMENT’S DISCUSSION and ANALYSIS 

President’s Management Agenda (continued) 

In the FMC’s FY 2005 Annual Performance Plan, performance goals were aligned with the agency’s strategic 

goals for the first time, a major change from previous plans which aligned performance goals by agency program. 

 

Competitive Sourcing - The FMC submitted its FY 2005 Federal Activities Inventory Reform Act Inventory to 

OMB in June 2005. The Inventory identifies 78 of the agency’s 133 FTEs as commercial activity FTEs. No 

challenges to its commercial inventories have ever been received. 

Expanded Electronic Government - The FMC has planned and continues to implement the expansion of electronic 

government. A major accomplishment during FY 2005 was the unveiling of the agency’s new, expanded, updated 

and more user-friendly public website. In FY 2005, the FMC’s SERVCON system was re-written to provide 

greater functionality and increased security features. Network and security upgrades were effected to provide an 

upgraded platform for the delivery of electronic services to agency staff and stakeholders. 

The FMC also developed its Enterprise Architecture to formally define its IT functionality. Further, the FMC has 

implemented a Capital Planning and Investment Control process, and has formalized its Systems Development 

Life Cycle process. 

Improved Financial Performance - The FMC received an unqualified opinion on its financial statements in FY 

2005, for the second straight year. The FMC will continue to strive to achieve unqualified audit opinions. 

Financial Performance Overview 

As of September 30, 2005, the financial condition of the FMC was sound with respect to having sufficient funds to 

meet program needs and adequate control of funds in place to ensure obligations did not exceed budget authority. 

The FMC’s accounting services provider, the Bureau of the Public Debt (“BPD”), prepared the agency’s financial 

statements in accordance with accounting standards codified in the Statements of Federal Financial Accounting 

Standards and the Office of Management and Budget Circular A-136, Financial Reporting Requirements (Revised 

8/23/2005). 
 7 

 Management’s Discussion and Analysis FY 2005 

Chapter One 

 

 MANAGEMENT’S DISCUSSION and ANALYSIS 

Sources of Funds 

The FMC has a single source of funds, Salaries and Expenses, funded by an annual appropriation that is available 

for commitments and obligations 

incurred during the fiscal year in which 

the authority was granted. The FMC’s 

total new budget authority for fiscal 

year 2005 was just over 19 million. 

This represents a net increase in budget 

authority over fiscal year 2004 of 561 

thousand dollars. Although the FMC 

collects remittances for “user fees” and 

“fines and penalties,” the agency is not 

authorized to offset any of its budget 

authority by utilizing these funds. The 

collections are deposited directly into 

the Treasury General Fund, and 

captured in the Statement of Custodial 

Activity which can be found in Chapter 3, Auditors’ Reports and Financial Statements.

Personnel Strength History 

 

As the chart demonstrates, the FMC’s actual FTE level has fluctuated slightly since 1999, with a decline in FTEs 

during the early 2000s, followed by 

modest growth and recent small 

fluctuations of the FTE level. The 

agency has endeavored to develop the 

appropriate mix of staffing and other 

available means to ensure the effective 

accomplishment of our mission. 

In recent years, the Commission has 

been authorized a total of 180 full-timeequ iv alen t po sition s. Du e to 

appropriation levels, the Commission 

has been required to maintain full-time 

personnel levels much lower than 

authorized. 

Federal Maritime Commission 

Appropriation 

(000s)

14,133

18,471 19,032 16,447 16,591 14,097 15,466

8,000

13,000

18,000

23,000

1999 2000 2001 2002 2003 2004 2005 2006

Fiscal Year

Appropriation

Federal Maritime Commission FTE Strength

124

127 129 129 121

139

128

100

125

150

175

200

1999 2000 2001 2002 2003 2004 2005 2006

Fiscal Year

Strength

Authorized FTE Strength
 FY 2005 FEDERAL MARITIME COMMISSION 

 8 

Uses of Funds by Expense Category 

In FY 2005, the FMC incurred new obligations of $19.3 million, which was a $993 thousand dollars increase over 

fiscal year 2004. Approximately 72.6% of the total appropriation was used for salaries and benefits. Of the 

remaining budget authority, .7% was used for Commission travel expenses and the remaining 26.7% was used for 

administrative expenses also known as operating expenses (e.g., rent, furniture, printing, maintenance). The unobligated authority balance of $1,302 will remain active for four years to service FMC-established requirements. 

Audit Results 

The FMC received an unqualified opinion on its FY 2004 financial statements from the auditing firm of Clifton 

Gunderson LLP under contract through the FMC’s Inspector General. For FY 2005, the FMC was again awarded 

an unqualified opinion on its financial statements. Comparative statements can be located in Chapter 3, Auditors’ 

Reports and Financial Statements. 

Financial Statement Highlights 

The financial statements have been prepared to report the financial position and results of operations of the entity, 

pursuant to the requirements of 31 U.S.C. 3515(b). While the statements have been prepared from the books and 

records of the entity in accordance with the formats prescribed by OMB, the statements are in addition to the 

financial reports used to monitor and control budgetary resources which are prepared from the same books and 

records. The statements should be read with the realization that they are for a component of the U.S. Government, 

a sovereign entity. One implication of this is that liabilities cannot be liquidated without legislation that provides 

resources to do so. 

The FMC’s financial statements summarize the financial position and financial activity of the agency. The 

financial statements, footnotes and the remainder of the required supplementary information appear in their 

entirety in Chapter 3, Auditors’ Report and Financial Statements. A brief analysis of the principal statements 

follows. 

Chapter One 

 MANAGEMENT’S DISCUSSION and ANALYSIS 

Utilization of Funds by Expenses Categories

($000s)

5,164

14,043

133

13,415

121

4,811

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Salaries & Expenses Travel Administrative

FY 2005 FY 2004
 9 

 Management’s Discussion and Analysis FY 2005 

Chapter One 

 MANAGEMENT’S DISCUSSION and ANALYSIS 

Analysis of the Balance Sheet 

The FMC’s assets in fiscal year 2005 were 

$2,269,606 as of September 30, 2005. This 

represents an increase over fiscal year 2004 of 

$307,418. The FMC’s assets reported in the 

balance sheet are summarized in the 

accompanying table. 

The Fund Balance with Treasury represents 

the FMC’s largest asset of $2,217,146 as of 

September 30, 2005. This is an increase of 

19.9% over fiscal year 2004 and represents 

97.7% of the agency’s total assets. The Fund 

Balance with Treasury is comprised only of annual appropriations maintained by the Department of the Treasury 

to address current liabilities. 

Accounts Receivable as of September 30, 2005, was at $2,021.00. This is a 169% increase over fiscal year 2004, 

and accounts for .09% of the FMC’s total assets. 

Capital Assets, also known as Property, Plant and Equipment, accounts for 2.21% of the FMC’s total assets as of 

September 30, 2005. The “Net” value of $50,439 accounts for the depreciation of all assets and represents the 

current book value of those assets. 

The FMC’s Liabilities totaled $1,957,549 as 

of September 30, 2005. The accompanying 

table depicts an increase of $252,201 total 

liabilities over fiscal year 2004. Accounts 

Payable represents the total goods and services 

received by the FMC as of September 30, 

2005. The FMC is not in receipt of a billing 

from the various vendors as of the close of 

fiscal year 2005. Federal Employee Benefits 

represents accrued salaries and liabilities that 

are not funded by budgetary resources. These 

liabilities represent future workman’s 

compensation, and accrued annual leave that remains on the books. The Federal budget process does not recognize 

future benefits for today’s employees, however, these liabilities will be recognized in future budget cycles as they 

are paid. 

Net Position is the difference between total 

assets and total liabilities. The total net 

position for fiscal year 2005 is an increase of 

$55,217 from fiscal year 2004. Unexpended 

Appropriations represents the total authority 

granted by Congress that the FMC has not 

expended as of September 30, 2005. 

Cumulative Results of Operations represents 

the net results of all operations of the FMC. The decrease in Cumulative Results is due mainly to the net decrease 

in Capital Assets as of September 30, 2005. 

FY 2005 FY 2004 

Fund Balance with Treasury $2,217,146 $1,849,004 

Accounts Receivable $2,021 $749 

Capital Assets $50,439 $112,435 

Other $0 $0 

Summary of Assets as of September 30, 2005 

Total Assets 2,269,606 1,962,188 

Summary of Liabilities as of September 30, 2005 

FY 2005 FY 2004 

Accounts Payable $89,197 $102,935 

Payroll Taxes Payable $82,970 $71,980 

Accrued Liabilities $10,130 $10,381 

Total Liabilities $1,957,549 $1,705,348 

Federal Employee Benefits $1,775,252 $1,520,052 

Net Position Summary as of September 30, 2005 

FY 2005 FY 2004 

Unexpended Appropriations $1,231,683 $1,124,548 

Cumulative Results of Operations ($919,626) ($867,708) 

Total Net Position $312,057 $256,840 
 FY 2005 FEDERAL MARITIME COMMISSION 

 10 

Chapter One 

 MANAGEMENT’S DISCUSSION and ANALYSIS 

Analysis of Net Cost 

The analysis of Net Costs presents the net 

cost of FMC’s five Commission Programs as 

identified in the FMC’s Annual Report. The 

five agency programs are Formal 

Proceedings, Inspector General, Equal 

Employment Opportunity, Operations and 

Administration. The Statement of Net Costs 

shows the net cost of operations for the 

agency as a whole and its sub-organizations 

and/or programs. Net Costs compared to 

Budgetary Resources can be found in 

Chapter 3, Auditors’ Report and Financial Statements. 

Analysis of the Statement of Changes in Net Position 

The Statement of Changes in Net Position, found on page nine, reports the change in the agency’s net position 

during the reporting period. The statement is a summary of two factors, Unexpended Appropriations and 

Cumulative Results in Operations. The increase of $55,217 from fiscal year 2004 to fiscal year 2005 is due 

principally to the net change in Cumulative Results of Operations due to further depreciation of Capital Assets and 

an increase in unexpended appropriations. 

Analysis of the Statement of Budgetary Resources 

 The Statement of Budgetary Resources (SBR) 

shows the source of the agency’s budgetary 

resources and the status of those resources at 

the end of the reporting period. The statement 

shows the relationship between budgetary 

resources and the status of the resources. The 

total budgetary resources must be equal to the 

status of budgetary resources at all times. A 

more detailed SBR can be found in Chapter 3, 

Auditors’ Report and Financial Statements. 

For fiscal year 2005, the FMC had total 

budgetary resources available of $19,622,729. This represents a 5.6% increase over fiscal year 2004 budgetary 

resources available of $18,581,200. For fiscal year 2005, the Statement of Budgetary Resources shows the FMC 

had incurred obligations of $19,441,873, representing 99% of funding available, and had an unobligated balance of 

$180,856. 

Analysis of the Statement of Financing 

The Statement of Financing is intended to provide a connection between accrual-based information (financial 

accounting) contained within the Statement of Net Cost and the obligation-based information (budgetary 

accounting) contained within the Statement of Budgetary Resources. The Statement of Financing provides a 

reconciliation between the budgetary and proprietary accounting information within the financial system and 

ensures that they are in balance. Non-budgetary resources, costs not requiring resources, and financing sources yet 

to be provided are deducted from the budgetary obligations. This balance is then reconciled against the Net Cost of 

Operations. 

 Summary of the Statement of 

Net Cost as of September 30, 2005 

FY 2005 FY 2004 

Intragovernmental Net Costs $7,140,719 $6,248,754 

Net Costs With the Public $13,270,708 $12,635,332 

Net Cost of Program Services $20,411,427 $19,064,086 

 Summary of the Statement of Budgetary Resources 

as of September 30, 2005 

FY 2005 FY 2004 

Total Budgetary Resources $19,622,729 $18,582,525 

Obligations Incurred $19,441,873 $18,391,284 

Status of Budgetary Resources $19,622,729 $18,581,200 

Unobligated Balance $180,856 $191,241 
 11 

 Management’s Discussion and Analysis FY 2005 

Improper Payments Information Act 

Narrative Summary of Implementation Efforts for FY 2005 

and 

Agency Plans for FY 2006—FY 2008 

I. The Federal Maritime Commission has not identified any program that in and of itself constitutes a 

high-risk for improper payments. Therefore, the FMC considers all of its payments to fall within the 

realm of high-risk. As such, the FMC has instituted a separation of duties concerning payments that 

has been very successful in curtailing any improper payments. The National Finance Center (“NFC”) 

became the agency’s payroll provider in 2002 and is responsible for monitoring and reporting on any 

payroll-related payments. Any overpayments made to an FMC employee by the NFC on behalf of the 

FMC are offset by NFC. In FY 2005, the FMC had one travel-related overpayment of $15.00. The 

FMC received two improper Intergovernmental Payments and Collections (“IPAC”) collections in the 

amount of $7,237.05, each made against the Commission’s Agency Location Code (“ALC”). The 

collecting agency was not a trading partner of the FMC and the improper IPAC collections have since 

been reversed. 

II. The FMC did not use a statistical sample to conduct its improper payment rate. The sample contains 

one hundred percent of all disbursements made by the FMC. This was the case for all programs. 

III. In order to reduce the rate of improper payments, the FMC will continue to monitor all payments to 

strive for a zero dollar improper payment figure. To this end, the FMC will ensure that there are 

sufficient segregation of duties pertaining to payments concomitantly with closer scrutiny of all IPAC 

collections made against the Commission. The cause of the overpayments resided in improper IPAC 

collections made against the Commission’s ALC for services that were not rendered to the FMC, and 

a double payment for local travel expenses. The improper IPAC collections were reversed and the 

FMC is in the process of collecting the travel overpayment. The FMC will continue to monitor all 

disbursements made on its behalf to ensure payments are valid and proper. 

IV. The table below represents the improper payments made by the FMC in FY 2005 with percentage 

forecasts through FY 2008. To reflect a total percentage, the decimal point would need to be carried 

out to the 9th position. The same is true to reflect as a percentage the $15.00 overpayment in the 

Inspector General Program and the improper IPAC collections identified in the Administration 

Program. Therefore, FY 2005 exhibits 0% in improper payments. 

Chapter One 

 MANAGEMENT’S DISCUSSION and ANALYSIS 

FY05 FY05 FY 05 FY 06 FY07 FY 08

Program Outlays IP % IP $ % % %

Formal Proceedings 6.00 0.0000 0.0000 0.00 0.00 0.00

Inspector General 0.00 0.0000 0.0000 0.00 0.00 0.00

Equal Employment Opportunity 0.00 0.0000 0.0000 0.00 0.00 0.00

Operations 8.00 0.0000 0.0000 0.00 0.00 0.00

Administration 4.00 0.0000 0.0145 0.00 0.00 0.00

Totals 18.00 0.0000 0.0145 0.00 0.00 0.00

Improper Payment Reduction Outlook FY 2005 - FY2008 

(Millions)
 FY 2005 FEDERAL MARITIME COMMISSION 

 12 

Chapter One 

 MANAGEMENT’S DISCUSSION and ANALYSIS 

Improper Payments Information Act (continued) 

V. The FMC has in place a segregation of duties to ensure that all invoices processed for payment are 

legitimate expenses of the agency. When an invoice is received it is first verified as a valid invoice 

belonging to the agency. The invoice is then processed by the OMS to identify the proper purchase order 

the payment is to be expensed against. The OBFM then processes the invoice against the purchase order to 

ensure that there are sufficient funds available on the purchase order to make the payment. If there are 

insufficient funds on the purchase order, a request is made to modify the purchase order to increase 

funding. Once the payment authorization has been processed, it is verified by a second member of the 

finance office. From there the payment request is forwarded to the BPD for processing. When the payment 

is loaded into the Oracle database, a final funds availability check is made by the financial system against 

the fund controls set for the FMC. Currently the fund controls are set to the summary appropriation level. 

 The receipt of an invalid IPAC collection must be processed as a payment for the reason that the funds 

have already been moved from the Treasury General Fund as a disbursement against the FMC’s ALC. The 

internal controls in place remain unchanged, with a closer scrutiny paid to all invoices and subsequent 

payments. The agency was able to have the improper IPAC collections in the amount of $14,474.10 

reversed and credited back to the General Fund. We are currently in the process of collecting the $15.00 

overpayment made against a local travel voucher. 

VI. The Chairman, as the Chief Administrative Officer of the FMC, is ultimately responsible for the efficient 

and effective utilization of the authority granted the agency by Congress. The Chairman has delegated 

financial responsibility to the Director, OBFM. The Director of OBFM has the responsibility to ensure that 

all disbursements made by BPD on behalf of the FMC are legitimate expenses of the agency and that there 

are sufficient funds available. The OBFM is responsible for reducing and recovering improper payments, 

and keeps senior agency officials appraised of all relevant activities. 

VII. a. The FMC does not have an in-house information system to help reduce improper payments. The agency 

utilizes the infrastructure and financial system maintained in Parkersburg, WV by BPD. 

 b. In fiscal year 2005, the FMC requested funding to maintain the contract between the FMC and BPD for 

financial support and platform access to the Oracle database through Oracle’s Discoverer portal. 

VIII. There are no statutory or regulatory barriers that limit the agency’s ability to take corrective actions to 

address any improper payments. 

IX. The current IPAC system does not allow an agency to refuse a collection against its ALC through the 

general fund it deems improper. The end result is a requirement to make the payments during the 

accounting period in which the collection was made and reversing the collection at a later date. The ability 

to challenge the collection would reduce the number of improper collections made against the agency, 

therefore reducing the number of improper payments. 
 13 

 Management’s Discussion and Analysis FY 2005 

Chapter One 

 MANAGEMENT’S DISCUSSION and ANALYSIS 

Systems, Controls, and Legal Compliance 

This section provides information on FMC’s compliance with the: 

Federal Managers’ Financial Integrity Act 

Federal Financial Management Improvement Act 

Prompt Payment Act 

Debt Collection Improvement Act 

Biennial Review of User Fees 

Performance Measure Summary 

Inspector General Act 

Federal Managers’ Financial Integrity Act 

The Federal Managers’ Financial Integrity Act (“FMFIA”) requires that agencies establish controls that reasonably 

ensure that obligations and cost comply with applicable law; assets are safeguarded against waste, loss, 

unauthorized use, or misappropriation; and revenues and expenditures are properly recorded and accounted for. It 

requires the agency head to provide an assurance statement of the adequacy of management controls and 

conformance of financial systems with Government standards. 

In his Message earlier in this document, the Chairman provided his annual assurance statement. This statement 

was based on various sources and included management knowledge gained from the daily operation of agency 

programs and reviews, discussions with senior managers who together comprise the agency’s Senior Policy Group, 

audits of financial statements, annual performance plans, and Inspector General’s reports, among other sources. 

The Senior Policy Group is comprised of all SES-level senior executives, including the Director of Operations, 

the General Counsel, and the agency’s Chief Financial Officer, among others. Additionally, the Chairman meets 

regularly with, and receives regular reports from, the FMC’s Inspector General. 

Management control deficiencies, when identified, are addressed at the highest management levels within the 

agency. For instance, corrective actions for material weaknesses identified in the agency’s information technology 

area are overseen directly by the agency’s Chief Information Officer. 

FY 2005 FMFIA Results 

The Chairman of the FMC determined that, as of September 30, 2005, the management controls of the FMC 

provide reasonable assurance that the objectives of the FMFIA are being met, and that the FMC, as a whole, is in 

compliance with section 2 of the FMFIA. The FMC’s financial management systems also are in substantial 

compliance with the objectives of the FMFIA, and the Commission is in compliance with section 4 of the FMFIA. 

During the fiscal year, the FMC mitigated one material weakness which was first identified in a previous fiscal 

year. This weakness concerned the adequacy of the agency’s information technology office to support the agency’s 

mission in the areas of management, operations and technology. Much progress had been made to address this 

weakness in previous fiscal years, however some issues remained to be addressed during FY 2005. The final 

corrective actions necessary to correct this deficiency were completed during the fiscal year. The FMC has 

strengthened its IT management, operations, and technology infrastructure and staffing, including finalizing 

numerous standard operating procedures, completing procedures for system life cycle development, implementing 

an improved Help Desk system, improving staff skill levels, and hiring an IT Security Officer, among other things. 

Additionally, the FMC made an extensive commitment during recent fiscal years to improving its IT infrastructure 

by upgrading network security, stabilizing the network environment, replacing all personal computers, adopting a 

more robust web content manager, and otherwise improving the posture of its IT infrastructure. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 14 

FY 2005 FMFIA Results (continued) 

The FMC is working to correct two material weaknesses first identified in a previous fiscal year. These material 

weaknesses are in the information technology program, and the FMC has made substantial progress to correct 

them, however a few issues remain before they can be considered fully corrected. 

The first of the two material weaknesses is the quality of certification and accreditation (“C&A”) documents and 

security self-assessments. The FMC hired an IT Security Officer who has conducted a review of the four systems 

and developed updated C&A documents for them: SERVCON, FMC Applications, FMC Form-1, and FMC 

Network. SERVCON and FMC Applications are operating under an Interim Authority to Operate until disaster 

recovery testing can be accomplished, at which time C&A documents can be certified. With respect to the 

remaining two systems, certain security issues have been discovered in FMC Form-1, and these issues impact on 

FMC Network. Major infrastructure and security upgrades have been implemented on the FMC Network. The one 

outstanding security issue remaining is FMC Form-1, which resides on the FMC network. Senior management has 

determined that, rather than fix the current FMC Form-1, a re-write of the application is required to resolve the 

deficiencies. 

It is expected that a contract to re-write FMC Form 1 will be effected early in FY 2006, and that certification of 

these two systems will be completed once the re-write is completed and disaster recovery testing can be 

accomplished. Disaster recovery testing for all systems is expected to be completed early in FY 2006, at which 

time the material weakness is expected to be mitigated. 

The second of the two material weaknesses is the lack of assurance that a contractor-operated system (SERVCON) 

is configured and operated under Federal security guidelines. The FMC has terminated the contract to operate the 

system off-site, transferred management of SERVCON to FMC in-house staff, and a re-write of the system’s 

security and password features has been completed. Disaster recovery testing is expected to be accomplished early 

in FY 2006, at which time this weakness will be mitigated. 

The existence of these material weaknesses does not preclude a statement of overall compliance, as the weaknesses 

are not sufficiently serious to prevent reasonable assurance of overall compliance. 

Federal Financial Management Improvement Act 

The Federal Financial Management Improvement Act requires agencies to implement and maintain systems that 

comply substantially with: Federal financial management system requirements; applicable Federal accounting 

standards; and the standard general ledger at the transaction level. The Act requires the agency head to determine 

whether the agency’s financial management systems comply with the Federal Financial Management Improvement 

Act and to develop remediation plans for systems that do not comply. 

FY 2005 Federal Financial Management Improvement Act Results 

The Chairman of the FMC determined that, as of September 30, 2005, FMC’s financial management systems were 

in substantial compliance with the Federal Financial Management Improvement Act. In making his determination, 

the Chairman considered the results of audits conducted by outside auditors in successive fiscal years, in addition 

to Inspector General reports, among other resources. 

Prompt Payment Act 

The Prompt Payment Act requires agencies to make timely payments to vendors for supplies and services, to pay 

interest penalties when payments are made after the due date, and to take cash discounts when they are 

economically justified. In FY 2005, the FMC maintained a percentage of on-time payments at 94.2%. The FMC 

will continue to strive towards 100% on-time payments in future years. The FMC has maintained a 100% on-time 

electronic/credit-card payment to its vendors. 

Chapter One 

 MANAGEMENT’S DISCUSSION and ANALYSIS 
 15 

 Management’s Discussion and Analysis FY 2005 

Chapter One 

 MANAGEMENT’S DISCUSSION and ANALYSIS 

Debt Collection Improvement Act

The Debt Collection Improvement Act enhances the ability of the Government to service and collect debts. The 

Act centralized the collection of non-tax delinquent debt owed to the government. The collection of delinquent 

debts is conducted by the Financial Management Service through the Treasury Offset Program where the names 

and taxpayer identification numbers (“TIN”) are matched against the TINs of recipients of government payments. 

The balance owed the government is deducted or offset from the payment to the entity to satisfy the debt. All 

Office of Personnel Management (“OPM”) retirement, vendor, IRS refunds, Social Security Benefits, and some 

federal salary payments are being offset. Federal agencies are required to refer delinquent accounts in excess of 

180 days to Treasury for collection. The goal of the FMC is to minimize the amount of delinquent debt owed to the 

agency. 

Biennial Review of User Fees 

The Chief Financial Officers Act requires agencies to conduct a biennial review of fees and other charges imposed 

by agencies, and to make revisions to cover program and administrative costs incurred. During FY 2005, the FMC 

published its revised fees subsequent to its biennial review. The fees are posted on the FMC’s website. 

Performance Measure Summary 

The FMC does not have an in-house financial accounting system, and as a small agency does not receive a 

Performance Measure Summary from the Department of the Treasury. The agency receives accounting services 

from BPD located in Parkersburg, WV. The Commission verifies and reconciles all financial statements and 

reports prior to submission, and has remained in compliance with all reporting thresholds including FACTS I 

(Federal Agencies’ Centralized Trial-Balance System) reporting, timely reporting, and reconciliation of any 

financial statement differences. 

Inspectors General Act 

The FMC has a very good record in resolving and implementing open audit recommendations presented in its 

Inspector General’s reports. Section 5(b) of the Inspector General Act requires agencies to report on final actions 

taken on Inspector General audit recommendations. More information can be found in Appendix C.

Briefly, during fiscal year 2005, the Inspector General completed the following audits/inspections: 

Audit of Procurement of Vendor Training Services 

Audit of Controls Over Agency Property 

Audit of Agreement Filings 

FY 2004 Financial Statements 

SERVCON Review 

 

The Inspector General’s reviews disclosed no instances of questioned costs nor were any recommendations made 

that funds be put to better use, nor were any material weaknesses reported. The FMC has addressed a number of 

recommendations from these reviews, and it is anticipated that the few which remain outstanding will be 

completed early in FY 2006. 

During FY 2005, the agency worked diligently to correct two material weaknesses which had been identified in a 

previous fiscal year. It is anticipated that final corrective action on both material weaknesses will be completed in 

FY 2006. Further, one material weakness identified in a previous fiscal year was mitigated. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 15 

CHAPTER TWO

PROGRAM PERFORMANCE 

Fiscal Year 2005 
 16 

 Management’s Discussion and Analysis FY 2005 

Chapter Two 

 PROGRAM PERFORMANCE 

Introduction 

This chapter presents information on the performance of the FMC during FY 2005. The FMC’s performance 

measurement system is discussed, along with the alignment of resources to strategic goals, and a summary of 

performance relative to specific performance goals. Following the discussion of performance goals, this chapter 

discusses the FMC’s efforts to address the President’s Management Agenda. 

FMC’s Performance Management System 

The FMC’s performance management system includes both strategic goals and performance goals and measures. 

The strategic goals, taken together, represent the FMC’s mission and reflect the overall outcomes to be achieved. 

The performance goals focus on outcomes which are contributors to achieving the agency’s strategic goals. The 

performance measures associated with each performance goal provide benchmarks for measuring how effectively 

the FMC is achieving its goals. 

Aligning Resources to Goals 

To achieve the FMC’s strategic goals, both steady state activities and fiscal year-specific performance goals have 

been developed. The FMC plans and budgets for its program activities during each fiscal year to ensure appropriate 

resources (funds and FTEs) are available to achieve its performance goals and accomplish its steady state 

activities. 

Future Improvements in Performance Management 

As a small agency, OMB agreed that the FMC should use an appropriately scaled mechanism for the GPRA 

process and development with a framework which would be productive, yet less resource-intensive. Nonetheless, 

the FMC strives to ensure its performance plans present relevant information clearly and concisely, and to be as 

detailed as possible while avoiding minutiae. 

In FY 2005, the FMC’s performance plan for the first time allocated all agency resources, and linked the agency’s 

performance goals, directly to its strategic goals instead of its budget program activities. This demonstrates the 

FMC’s substantial progress in integrating performance management and budget processes, as it fosters efforts to 

link planning, budgeting and performance more effectively. Future performance reports will continue to integrate 

performance management and budget by aligning agency resources with strategic goals. 

Program Activities 

Overview 

In Chapter 1 there is a description of the FMC’s organization and its regulatory responsibilities. In order to carry 

out its mandates, the FMC operates under five program areas: Formal Proceedings, Equal Employment 

Opportunity, Inspector General, Operations, and Administration. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 17 

Chapter Two 

 PROGRAM PERFORMANCE 

Formal Proceedings Program 

Office of the Commissioners 

Five Commissioners are appointed by the President with the advice and consent of the Senate. The president 

designates one of the Commissioners to serve as Chairman. The Chairman has exclusive authority over agency 

personnel matters, organization and supervision, distribution of business, and use of funds for administrative 

purposes. 

The Chairman and the other four Commissioners are responsible for deciding cases in which parties must have the 

opportunity to be heard. During FY 2005, the Commission issued 30 orders and/or notices in formal proceedings. 

The Commission also issued 12 orders in non-docketed proceedings. 

Office of the Secretary 

The Office of the Secretary serves as the focal point for all matters submitted to and emanating from the 

Commission. Accordingly, the Office is responsible for preparing and submitting regular and notation agenda 

matters for consideration by the Commission, and preparing and maintaining the minutes of actions taken on these 

agenda and notation matters; receiving and processing formal and informal complaints involving violations of the 

shipping statutes and other applicable laws; receiving and processing special docket applications and applications 

to correct clerical or administrative errors in service contracts; issuing orders and notices of actions of the 

Commission; maintaining official files and records of all proceedings; receiving all communications, petitions, 

notices, pleadings, briefs, or other legal instruments in regulatory and quasi-judicial proceedings and subpoenas 

served on the Commission or members thereof; administering the Freedom of Information, Government in the 

Sunshine, and Privacy Acts; responding to information requests from the maritime industry, the public, and FMC 

staff; issuing publications and authenticating instruments and documents of the Commission; compiling and 

publishing Commission decisions; maintaining and promulgating official copies of the FMC's regulations; and 

maintaining the FMC's Public Reference/Law Library, Docket Activity Library and Internet website. The 

Secretary's Office also participates in the implementation of legislative changes to the shipping statutes. Further, 

the Secretary’s office oversees the administration of the Office of Consumer Affairs and Dispute Resolution 

Services. 

Looking Back: 2005 

• In FY 2005, the Office of the Secretary issued 42 orders and/or notices in formal docketed and non-docketed 

proceedings, processed 48 agenda items, 60 pages of minutes, 290 Federal Register Notices, and 47 FOIA 

requests. The Office also completed the redesign of the agency’s website, to enhance its content, organization 

and functionality. 

Looking Ahead: 2006 

• In FY 2006, the Office of the Secretary will continue to make certain documents filed in formal proceedings 

available in an electronic format through its website. 

• In FY 2006, the Office will complete a project for scanning and posting historical Commission decisions 

issued between 1989 and 1996. 
 18 

 Management’s Discussion and Analysis FY 2005 

Chapter Two 

 PROGRAM PERFORMANCE 

Office of Consumer Affairs and Dispute Resolution Services 

The Office of Consumer Affairs and Dispute Resolution Services implements the FMC's Alternative Dispute 

Resolution ("ADR") program, and provides ombuds services and responds to inquiries and complaints. Under this 

program, parties to a dispute are encouraged to avail themselves of services provided by the FMC to resolve 

disputes through mediation or ombuds services. The Director of the Office is the FMC's Dispute Resolution 

Specialist. The Director and other trained Office staff serve as third-party neutrals in proceedings that are in 

litigation. CADRS personnel provide mediation services for a broad range of disputes, from informal, pre-litigation 

disputes to those involving significant matters in litigation. Ombuds services are provided to resolve a variety of 

immediate concerns involved with cargo shipments and cruise matters. Should a matter not be resolved through 

ombuds services, or through more formal mediation services, a claimant may choose to initiate an informal docket 

proceeding, alleging a 1984 Act violation. This is a form of arbitration, with both sides agreeing to be bound by the 

decision of the settlement officer. Claimants who prefer formal docket procedures may opt to file a formal 

complaint and fully litigate the dispute before the FMC’s Administrative Law Judges. Mediation services may 

also be provided in such formal proceedings. Also, CADRS staff review and decide special docket applications, 

which are requests to waive or refund freight charges. 

Looking Back: 2005 

• CADRS received 2,550 inquiries by phone, e-mail, and fax. In addition, 950 informal complaints, or ombuds 

cases, were received, and 12 informal dockets were filed. 

 

• CADRS received 400 household goods complaints. 

Looking Ahead: 2006 

• A goal for FY 2006 is to continue to promote the use of ADR. 

• Another goal in FY 2006 is to make more consumer protection information available through the 

Commission’s website, particularly regarding transportation of household goods. 

Office of the General Counsel 

The General Counsel provides legal counsel to the Commission. This includes reviewing staff recommendations 

for Commission action for legal sufficiency, drafting proposed rules to implement Commission policies, and 

recommending and preparing final decisions, orders, and regulations for Commission adoption. In addition, the 

Office of the General Counsel provides written and oral legal opinions to the Commission, its staff, and the general 

public in appropriate cases. As described in more detail below, the General Counsel also represents the FMC 

before the courts, Congress, and other government agencies and administers the FMC's international affairs 

program. 

Looking Back: 2005 

• In FY 2005, General Counsel produced 15 speeches, articles or presentations, participated in 30 interagency 

and international group sessions, and responded to 275 requests for information. 

International Affairs Program 

• In FY 2005, General Counsel produced 35 reports, policy papers, briefings, or controlled carrier 

recommendations. 

• In FY 2005, the FMC continued to monitor potentially restrictive shipping practices of the Governments of 

Japan and the People’s Republic of China ("PRC"). 
 FY 2005 FEDERAL MARITIME COMMISSION 

 19 

Chapter Two 

 PROGRAM PERFORMANCE 

2005 Legislative Activity 

• During FY 2005, 130 bills, proposals and Congressional inquiries were referred to the Office of the General 

Counsel for comment. The Office prepared and coordinated testimony for one Congressional hearing. The 

Office also worked closely with Congressional staffs on proposed legislation that affected the FMC and 

prepared a report to Congress on the sharing of ocean shipping information for the purpose of assisting law 

enforcement and anti-terrorism efforts. 

Looking Ahead: 2006 

• In FY 2006, the Office will increase relationships with other agencies with responsibilities related to maritime 

security. 

2005 Litigation 

The General Counsel represents the FMC in litigation before courts and other administrative agencies. The 

following is representative of matters litigated by the Office. 

• American Institute of Shipper’s Associations v. Federal Maritime Commission, D.C. Circuit, Case No. 05-

1036 - International Shippers’ Association v. Federal Maritime Commission, D.C. Circuit, Case No. 05-

1037. This proceeding is an appeal of the FMC’s final rule, and its order denying rehearing, in Docket No. 

04-12, Non-vessel-operating Common Carrier Service Arrangements (“NSRs”). In order to ensure that 

competition would not be harmed, that rule forbade NVOCCs and shippers associations with NVOCC 

members from acting as shippers in NSAs. The petitioners seek to convince the Court of Appeals either that 

the Commission’s rule is discriminatory against shippers associations with NVOCC members, or that the rule 

is entirely beyond the scope of the agency’s authority. On March 14, 2005, the following entities moved to 

intervene in support of the FMC’s rule: BAX Global Inc., FEDEX Trade Networks Transport & Brokerage, 

Inc., National Industrial Transportation League, Transportation Intermediaries Association, and United Parcel 

Service, Inc. On March 16, 2005, the Court, on its own motion, consolidated Case Nos. 05-1036 and 05-1037. 

The Fashion Accessories Shippers Association moved for permission to file an amicus curiae brief on April 

16, 2005. The Office of General Counsel filed a Certified Index of the Record on May 2, 2005. On May 11, 

2005, the Court granted all of the motions to intervene, and granted the Fashion Accessories Shippers 

Association motion for leave to participate as an amicus curiae. The Court has not yet scheduled briefing in 

this case. 

Office Of Administrative Law Judges

Administrative Law Judges regulate the course of proceedings, conduct hearings, approve settlements, and render 

decisions in adjudicatory proceedings held after receipt of a complaint, or when instituted by the Commission. 

ALJs have authority to administer oaths and affirmations; issue subpoenas; rule upon motions and offers of proof; 

receive evidence; authorize depositions; regulate the course of hearings; hold pre-hearing conferences for the 

settlement or simplification of the issues involved; refer matters to mediation when appropriate; dispose of 

procedural requests; act as settlement judges in particular cases; and take any other action authorized by agency 

rule or the Administrative Procedure Act. In FY 2005, the ALJs handled 12 formal proceedings. 

Looking Back: 2005 

• In FY 2005, the Office handled 12 formal proceedings. 
 20 

 Management’s Discussion and Analysis FY 2005 

Chapter Two 

 PROGRAM PERFORMANCE 

Looking Ahead: 2006 

• In FY 2006, the Office of Administrative Law Judges will continue to conduct hearings and render decisions 

on proceedings. 

Inspector General Program 

The Office of the Inspector General operates pursuant to the Inspector General Act of 1978, as amended in 1988. 

The 1988 amendments created additional statutory offices of inspector general at various designated Federal 

entities, including the FMC. The Office is an independent and objective unit which conducts audits, reviews 

operations and programs, investigates possible fraud, waste and abuse of Commission resources, and promotes 

economy, efficiency and effectives in programs and operations administered by the Commission. 

Looking Back: 2005 

• The Office issued a number of reports, including the required audit of the agency’s financial statements, an 

audit of agreement filings, an audit of controls over agency property, an audit of procurement of vendor 

training services, a required annual review of the agency’s information security program, and an evaluation of 

the agency’s SERVCON contract. 

Looking Forward: 2006 

• The Office will continue its high priority program of conducting program evaluations in order to improve 

agency programs and operations. 

• Statutorily required reviews will be conducted of the agency’s financial statements and information security 

program. 

Equal Employment Opportunity Program 

The Office of Equal Employment Opportunity (EEO) assists the FMC in carrying out its responsibilities relative to 

Titles VI and VII of the Civil Rights Act of 1964 and other laws, executive orders, and regulatory guidelines 

affecting affirmative employment and non-discrimination in the federal government. The Office of EEO 

administers and ensures the Commission's compliance with the laws, regulations and policies that prohibit 

discrimination in the Federal workplace based on race, color, national origin, religion, gender, age, disability, or 

reprisal. The Office of EEO is responsible for processing EEO pre-complaints and formal complaints, for 

encouraging resolution, and for establishing and maintaining a continuing affirmative program designed to 

promote equal opportunity in every aspect of the Commission's personnel policies and practices. 

Looking Back: 2005 

• In FY 2005, for the first time in the Commission’s history, women and minorities represented a majority of the 

workforce. 

• Ninety-five percent of the Commission's employees completed the No FEAR Act mandatory training. 

• The Office facilitated EEO workshops and programs on respect in the workplace, conflict resolution and 

sexual harassment. 

Looking Forward: 2006 

• The Office will continue all existing EEO programs and initiate additional activities and programs to promote 

equal opportunity in the agency and increase understanding of EEO concepts and principles. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 21 

Regulated Entities by Region*

0 200 400 600 800 1000 1200

Seattle

New Orleans

LA

South Florida

New York

Operations Program 

Office of Operations 

The Director of Operations is the senior staff official responsible to the Chairman for the management and 

coordination of FMC programs under the Bureau of Enforcement, the Bureau of Trade Analysis, and the Bureau of 

Certification and Licensing. 

Program accomplishments are detailed in individual bureau sections. In addition, the Office of Operations 

oversees the Area Representatives. 

Area Representatives 

The Commission maintains a presence in Los Angeles, South Florida, New Orleans, New York and Seattle through 

Area Representatives based in each of those areas. These representatives serve other major port cities and 

transportation centers within their respective areas. In addition to monitoring and investigative functions, Area 

Representatives represent the FMC within their jurisdictions, provide liaison between the FMC and the maritime 

industry and the shipping public, collect and analyze intelligence of regulatory significance, and assess industry 

conditions. Liaison activities involve cooperation and coordination with other government agencies and 

departments, providing regulatory information and relaying FMC policy to the shipping industry and the public, 

plus handling informal complaints within each representative's area of responsibility. 

Interaction between the Commission's Area Representatives and U.S. Customs and Border Protection ("CBP") 

with respect to the exchange of investigative information continues to be beneficial to both parties. Cooperation 

with CBP has expanded into several joint field operations to investigate entities suspected of violating both 

agencies’ statutes or regulations. Cooperative efforts also involved local police and the U.S. Citizenship and 

Immigration Services, when necessary. 

* Seattle, New Orleans, Los Angeles, and New York are covered by 1 Area Representative each; South Florida is 

covered by two Area Representatives. In addition to the Area Representatives under the Office of Operations, 

Bureau of Enforcement staff covers the mid-Atlantic consisting of 1,222 U.S. and foreign regulated entities. 

Chapter Two 

 PROGRAM PERFORMANCE 
 22 

 Management’s Discussion and Analysis FY 2005 

Chapter Two 

 PROGRAM PERFORMANCE 

Bureau of Enforcement 

The Bureau of Enforcement is the primary compliance and enforcement arm of the FMC. It works in various ways 

to ensure that regulated entities comply with statutory requirements. It offers guidance and assistance to help these 

entities achieve such compliance. Attorneys of the Bureau of Enforcement participate as trial counsel in formal 

adjudicatory proceedings. The Bureau also participates in formal complaint proceedings where intervention is 

appropriate. Bureau attorneys serve as legal advisors to the Director of Operations and other bureaus, and also may 

be designated Investigative Officers in non-adjudicatory fact finding proceedings. The Bureau monitors all other 

formal proceedings in order to identify major regulatory issues and to advise the Director of Operations and the 

other bureaus. The Bureau also participates in the development of Commission rules and regulations. Under the 

direction of the General Counsel, attorneys from the Bureau also may participate in matters of court litigation to 

which the FMC is a party. 

Looking Back: 2005 

• At the beginning of FY 2005, 39 enforcement cases were pending final resolution by the Bureau, the Bureau 

was party to 7 formal proceedings, and there were 56 matters pending which the Bureau was monitoring or for 

which it was providing legal advice. During the fiscal year, 15 new enforcement actions were commenced; 25 

were compromised and settled, administratively closed, or referred for formal proceedings; and 29 

enforcement cases were pending resolution at fiscal year's end. Also, the Bureau participated in 2 new formal 

proceedings, 3 proceedings were completed, and 6 formal proceedings were pending at the end of the fiscal 

year. Additionally, 65 matters involving monitoring or legal advice were received during the fiscal year, 60 

such matters were completed, and 61 were pending in the Bureau on September 30, 2005. 

• During FY 2005, the Bureau worked to obtain statutory compliance in all major trades and with all segments 

of the transportation industry, i.e., carriers, carrier agreements, MTOs, PVOs, and OTIs. 

• The Bureau also initiated enforcement action to address market-distorting activities such as various forms of 

secret rebates and absorptions, misdescriptions of commodities and misdeclarations or measurements, illegal 

equipment substitution, unlawful use of service contracts, as well as carriage of cargo by and for untariffed 

and unbonded non-vessel operating common carriers, and joint carrier activities outside the authority of filed 

agreements. 

 

Looking Ahead: 2006 

• In FY 2006, the Bureau will continue to pursue statutory compliance by entities regulated by the Commission, 

and the elimination of market-distorting, fraudulent and anticompetitive practices. 

• The Bureau will work with non-vessel-operating common carriers and vessel-operating common carriers to 

limit participation of unlawful entities in ocean transportation. 

• During FY 2006, the Bureau will review the results of recent major enforcement actions to assess 

effectiveness of remedies. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 23 

Chapter Two 

 PROGRAM PERFORMANCE 

Bureau of Trade Analysis 

The Bureau of Trade Analysis reviews agreements and monitors the concerted activities of common carriers by 

water under the standards of the 1984 Act. The Bureau also reviews and analyzes service contracts and NSAs, 

monitors rates of government controlled carriers, reviews carrier published tariff systems under the accessibility 

and accuracy standards of the 1984 Act, and responds to inquiries or issues that arise concerning service contracts 

or tariffs. The Bureau also is responsible for competition oversight and market analysis, focusing on activity that is 

substantially anti-competitive and market distorting in violation of the 1984 Act. BTA strives to be an expert 

organization on the economics of international liner shipping and maritime agreements, especially with respect to 

issues of competition and unfair trade practices as they may affect the interests of the shipping public and U.S. 

international trade. 

An integral part of BTA's responsibilities is the systematic surveillance of carrier activity and commercial 

conditions in the U.S. liner trades. Accordingly, BTA administers a variety of monitoring programs, and other 

research efforts, designed to apprise the Commission of current trade conditions, emerging commercial trends, and 

carrier pricing and service activities. 

Office of Agreements 

The Bureau's agreement program activities consist of: (1) processing carrier and marine terminal agreement filings 

under the procedures of the 1984 Act as modified by OSRA; (2) conducting a comprehensive review and analysis 

of all pertinent legal and commercial facets of agreements to recommend appropriate action to the Commission on 

the disposition of filed agreements; (3) making appropriate recommendations on requests for a waiver of 

Information Form and Monitoring Report filing requirements; (4) maintaining the FMC's official agreement 

archives; and (5) maintaining an agreement database that contains pertinent information on each carrier and marine 

terminal agreement filed with the FMC. 

Looking Back: 2005 

• During FY 2005, the Bureau received 213 carrier agreement filings and 33 terminal agreement filings. The 

Bureau also received and reviewed minutes of meetings and reports filed by various agreement parties. 

• With the implementation of revised and updated agreement rules earlier in the year, a number of filers have 

used the new low market share exemption to have their agreement filings become effective on filing. Under 

this exemption agreements that do not raise serious competitive concerns are allowed to become effective 

without waiting the statutorily required 45 days. 

• Also in reaction to the new agreement rules on the filing of minutes of meetings, a number of agreement 

parties removed pricing authority, a trigger for filing minutes, from their agreements. Further, several 

conferences and rate discussion agreements added liability clauses to limit the liability when parties meet and 

fail to file minutes or when a party or parties fail to submit individual monitoring report data. 

• In FY 2004, the Bureau completed automating its carrier agreement library and now provides electronic copies 

of carrier agreements to the public. In FY 2005, the Bureau, in conjunction with the Office of the Secretary 

and the Office of Information Technology, implemented links on the agency’s website to allow the public to 

directly access the Bureau’s automated carrier agreement library. 

Looking Ahead: 2006 

• In the future, the Bureau will undertake an evaluation of the impact of the new agreement rules on the industry 

and on the internal processes of the agency. Further, the Bureau plans on completing the automation of its 

terminal agreement library and having it accessible through the agency’s website.
 24 

 Management’s Discussion and Analysis FY 2005 

Chapter Two 

 PROGRAM PERFORMANCE 

Office of Economics and Competition Analysis 

To keep the Commission apprised of current trade conditions, emerging commercial and economic trends, and the 

impact of regulations affecting waterborne liner transportation, the Bureau prepares studies and profiles of major 

trades, monitoring reports, economic analyses, and agreement/carrier profiles, and undertakes special projects to 

identify and track relevant competitive and economic activity in major U.S. trade lanes. The Bureau’s monitoring 

activities include surveillance programs to identify: (1) concerted activity without an effective agreement on file 

with the FMC, or concerted activity exceeding the scope or authority of an effective agreement; (2) activity 

contravening the mandatory conference agreement provisions required by sections 5(b) and 5(c) of the 1984 Act; 

(3) the potential for, or emergence of, unreasonable transportation service/cost impacts that contravene the section 

6(g) general standard; (4) controlled carrier activity in areas relevant to the FMC’s administration of section 9 of 

the 1984 Act; (5) the occurrence of prohibited acts proscribed under section 10; (6) economic harm associated with 

unfair trade practices of foreign governments; and (7) whether the continued operation of an effective agreement in 

its present form is consistent with the statutes and current FMC decisions, rules, and policies. The Bureau 

develops profiles of major trade areas to assess carrier behavior under agreements, to determine compliance with 

regulatory requirements, and to ascertain the competitive posture of carriers, shippers, and shippers’ associations 

within each trade. 

Looking Back: 2005

• The Bureau received 1,070 sets of minutes and 198 quarterly monitoring reports in FY 2005. Under the 

new agreement reporting regulations (45 CFR part 535), revised monitoring reports began arriving in June 

2005. 

• The Bureau produced a variety of reports and analyses, including two further editions of its Trade Profile 

for the Commission, with data on liner cargo growth, vessel capacity, average revenue per TEU, etc., in 

the major U.S. trades, and analyses of an exclusive terminal agreement between the City of Portland, 

Maine and a vessel operator serving the Portland to Yarmouth, Nova Scotia passenger/passenger-vehicle 

trade. 

• Other projects undertaken by the Bureau included, notifications to filing counsels of which agreements 

were subject to the new reporting regulations, review and analysis of the merits of requests for waivers to 

the new reporting regulation, redesign of the agreements’ database, and conducting economic analyses of 

filed agreements and modifications, including the West Coast Terminal Operators Agreement to 

implement traffic mitigation fees at the ports of Los Angeles and Long Beach. 

Looking Ahead: 2006 

• The Bureau intends to convert its historical PIERS data into MS Access and to implement a user-friendly, 

web-based PIERS data analysis system. 

• The planned new PIERS data system will be linked to the revised agreements database to facilitate production 

of the Bureau’s regular trade monitoring publications and other trade analysis reports. 

• The agreements database will be further enhanced to accept electronic submission of minutes and quarterly 

monitoring reports and to make those documents searchable. 

• Planned changes to Trade Profile will give that publication a stronger forward-looking flavor. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 25 

Chapter Two 

 PROGRAM PERFORMANCE 

U.S. Container Cargo Volumes (TEUs) 

Source: Journal of Commerce/PIERS, Trade Horizons (Spring 2005 and 2003). 

* Note: The fiscal year 2005 figures include forecasts for the last three quarters. 

Office of Service Contracts and Tariffs 

The 1984 Act allows ocean common carriers, either individually or through agreements, to negotiate and execute 

service contracts with one or more shippers or shippers’ associations. Under service contracts, shippers make a 

commitment to provide a certain volume or portion of cargo over a fixed period of time and carriers commit to a 

specified rate and a defined service level. These contracts are filed confidentially with the FMC. A concise 

statement of certain contract terms, i.e., commodity or commodities involved, minimum volume or portion, 

duration, and origin and destination port ranges, is required to be published in carriers’ or conferences’ tariffs. 

Service contracts offer an alternative to transportation under tariff terms. Contract flexibility enables carriers to 

tailor their transportation services to the specific commercial and operational needs of shippers. The 

confidentiality of contracts has spurred commercial innovations and brought greater efficiencies in the movement 

of cargo. Overall, the use of service contracts has continued to increase significantly due primarily to the 

efficiency, flexibility, and confidentiality of one-on-one negotiation of contracts between shippers and carriers. 

Under final rules in the FMC’s Docket No. 04-12, NVOCCs are permitted to enter into, and file with the FMC, 

NVOCC Service Arrangements with their shipper customers. These arrangements are similar to the confidential 

service contracts of common carriers and agreements of ocean common carriers. 

The 1984 Act, as amended by OSRA, requires carriers and conferences to publish their tariffs in private electronic 

systems. Tariffs are to be made available, typically through Internet access, to any person, without time, quantity, 

or other limitation. Carriers are permitted under law to charge a reasonable fee for providing public access to their 

tariffs. The Bureau reviews and monitors the accessibility and accuracy of the private systems and reviews 

published tariff material for compliance with the 1984 Act’s requirements. The Bureau continues to act upon 

applications for special permission to deviate from tariff publishing rules and regulations. 

Year

2000

2001

2002

2003

2004

Forecasts

2005

2006

 U.S. Imports Annual Growth

 11,261,101 11.9%

 11,366,221 0.9%

 13,134,611 15.6%

 14,155,374 7.8%

 15,981,875 12.9%

 17,049,876 6.7%

 18,064,457 6.0%

 U.S. Exports Annual Growth

 6,832,463 7.4%

 6,615,846 -3.2%

 6,668,727 0.8%

 7,255,027 8.8%

 7,836,234 8.0%

 8,530,090 8.8%

 9,514,385 11.5%
 26 

 Management’s Discussion and Analysis FY 2005 

Chapter Two 

 PROGRAM PERFORMANCE 

Looking Back: 2005 

• During FY 2005, the Bureau received 50,200 new service contracts and 224,160 contract amendments. 

• An estimated 120 NSAs and 40 amendments were filed by NVOCCs under the FMC’s Final Rule in Docket 

No. 04-12, NVOCC Service Arrangements.

• 3,873 active/current tariff location addresses for carriers, conferences, and MTOs were posted on the FMC’s 

homepage during FY 2005. A total of 1,625 inactive/cancelled tariff location addresses were posted as well. 

• The Bureau continued to monitor accessibility to tariffs published in carriers’ automated tariff systems 

(“CATs”). Adjustments were made to some CATs and various NVOCC tariffs to bring them into compliance. 

Looking Ahead: 2006 

• The Bureau intends to focus on enhancing the use of service contract and NSA data, and evaluate SERVCON 

system functionality. 

• The Bureau will continue to participate in activities to help identify any service contract provisions which may 

be significant to maritime security concerns. 

Bureau of Certification and Licensing 

The Bureau of Certification and Licensing (1) licenses and regulates OTIs, including ocean freight forwarders and 

NVOCCs; (2) issues certificates to owners and operators of passenger vessels that evidenced financial 

responsibility to satisfy liability incurred for nonperformance of voyages or for death or injury to passengers and 

other persons and (3) manages programs assuring financial responsibility of OTIs and PVOs, by developing 

policies and guidelines, and analyzing financial documents. In carrying out these functions, the Bureau provides 

information and referrals in response to a wide array of informal inquiries, and provides guidance with respect to 

licensing and bonding. 

Office of Transportation Intermediaries 

 

The Office of Transportation Intermediaries is responsible for reviewing and approving applications for OTI 

licenses, and maintaining and updating records about licensees. Without a license, an OTI may not legally operate 

in the United States. NVOCCs not domiciled in the U.S. are required to have a $150,000 bond and designate a 

U.S. resident agent. 

Looking Back: 2005 

• During FY 2005, the FMC received 417 new and 230 amended OTI applications. 306 new and 146 amended 

licenses were issued, 220 licenses were revoked, and an additional 55 non-U.S.-based unlicensed NVOCC 

bonds were cancelled. 

• As the result of Docket No. 04-02, Options Rider for Proof of Financial Responsibility, OTIs may file an 

optional rider for additional proof of financial responsibility for U.S.-domiciled licensed NVOCCs servicing 

the U.S./PRC trade, allowing them to meet financial responsibility requirements imposed on NVOCCs by the 

PRC. During FY 2005, the FMC processed 13 PRC bond riders for a total of 34 riders. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 27 

Chapter Two 

 PROGRAM PERFORMANCE 

• The FMC continues its effort at outreach to the industry to increase awareness of licensing and bonding 

requirements for OTIs. 

• The FMC completed its update of the Regulated Persons Index (“RPI”) database in FY 2005. Data elements, 

queries and standard reports have been identified and programmed, as applicable. The required functionality 

has been identified and staff is working on ensuring that the updated RPI is compatible with other FMC 

databases and will meet the needs of various FMC components. 

Looking Ahead: 2006 

• The Bureau will continue its efforts in FY 2006 to design electronic forms, especially the FMC-18, and further 

explore integration of FMC databases and the feasibility of electronic payments, e-signature and e-bond 

capability. 

• In FY 2006, the Bureau will continue its work to achieve the target of 30 days from receipt to completion of 

license applications. The current backlog is being cleared and a concerted effort is being made to process 

current applications between 30 and 45 days after receipt of all appropriate documentation. The option to file 

applications electronically should increase efficiency and allow analysts more time to perform analytical 

evaluations regarding information provided by OTI applicants. 

• In FY 2006, the Bureau will continue its efforts to directly inform active OTIs of licensing requirements and to 

assist small businesses in meeting the application and licensing requirements. The improved website should 

assist the Bureau in providing information to OTIs. 

Ocean Transportation Intermediary Statistics

Pre-OSRA As of 9/30/02 As of 9/30/03 As of 9/30/04 As of 9/30/05

Freight Forwarders

1,700 1,294 1,262 1,242 1,210

NVOCCs 2,200 1,298 1,317 1,401 1,455

Freight Forwarder /

NVOCC

400 873 900 946

 

 1,025 

Foreign NVOCC 

Unlicensed

0 653 721 775

 

 820 

Foreign NVOCC 

Licensed

0

41 40 36

 

 38 

TOTAL 4,300 4,159 4,240 4,400 4,548
 28 

 Management’s Discussion and Analysis FY 2005 

Chapter Two 

 PROGRAM PERFORMANCE 

Passenger Vessels and Information Processing 

The Office of Passenger Vessels and Information Processing (“OPVIP”) has the responsibility of implementing the 

Commission’s Passenger Vessel Program in accordance with Public Law 89-777 (46 CFR 540). This program 

ensures that passengers are indemnified against casualty or non-performance from cruise lines. The OPVIP is 

responsible for reviewing applications for certificates of financial responsibility, managing all activities with 

respect to evidence of financial responsibility of passenger vessel owner/operators, and developing and 

maintaining all Bureau databases and records of OTI applicants and licensee. 

Looking Back: 2005 

• The Passenger Vessel Program received 20 applications for Performance Certificates and processed 23, and 

received 14 and processed 17 applications for Casualty Certificates. 

• In addition, OPVIP worked with five cruise lines which ceased operations or left the trade to ensure all 

passengers due refunds under P.L. 89-777 received them and that where coverage was evidenced by escrow, 

the escrow accounts were closed appropriately. 

• A current list of licensed OTIs is maintained on the Commission’s website. This informs carriers and 

individuals regarding unlicensed OTIs, and is helpful to other government agencies, such as CBP’s Border 

Patrol. 

Monitoring Program 

During FY 2005, the Bureau developed and implemented a program to more effectively monitor PVO activities. 

The PVO monitoring program ensures that operators provide accurate and timely information required to be 

submitted and that evidence of adequate financial coverage has been provided. 

Looking Ahead: 2006 

• In FY 2006, the Bureau intends to continue working on the rulemaking to ensure that the Passenger Vessel 

Program provides adequate consumer protection without being unduly burdensome on the industry. 

In FY 2006, the Bureau will work closely with the PVOs to implement new rules and financial responsibility 

requirements on a timely basis. 

Administration Program 

Office of the Director 

The Office of Administration (“OA”) provides administrative support to the program operations of the 

Commission. The Director, OA, is responsible for the direct administration and coordination of the Office of 

Budget and Financial Management, the Office of Human Resources, the Office of Information Technology, and 

the Office of Management Services. Many of the functions and achievements of the OA are reflected below in the 

narratives for these offices. 

The Director, OA, provides administrative guidance to the Offices of the Commissioners, Secretary, General 

Counsel, Administrative Law Judges and Operations, and administrative assistance to the Offices of the Inspector 

General and Equal Employment Opportunity. The Director is the FMC’s Chief Acquisition Officer, Audit Followup and Management (Internal) Controls Official, and Forms Control Officer, and serves as the agency’s lead 

executive for strategic planning and implementation of the Government Performance and Results Act of 1993. The 

Deputy Director of Administration is the FMC’s Chief Information Officer. He also serves as the FMC’s 

Competition Advocate and Records Management Officer. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 29 

Looking Back: 2005 

• Guided the agency’s continuing efforts to enhance its information technology program and address 

recommendations made by the Inspector General through a contractor assessment of agency IT operations. 

• The agency’s financial management system received an unqualified opinion in its FY 2005 financial statement 

audit. 

• Directed preparation of the GPRA Annual Performance Plan and Annual Program Performance Report; 

prepared the Federal Activities Inventory Reform Act report, the Performance and Accountability Report 

(including the Management’s Discussion and Analysis and the Federal Managers’ Financial Integrity Act 

report), and transmittal letters for the Inspector General’s semiannual reports to Congress. 

• Prepared the Agency Regulatory Plan, Semiannual Unified Agendas, and the SBPRA Implementation Plan, 

and coordinated completion of the agency’s 43rd Annual Report. 

Looking Ahead: 2006 

• The Office’s key objectives for FY 2006 are continuing to implement the Chairman’s policy directions aimed 

at refining and enhancing agency administrative programs and operations; monitoring the accomplishment of 

agency performance goals; initiating further information technology improvements; and working with senior 

managers to ensure effective strategic succession planning. 

• The Office also will take the lead in assuring an effective agency-wide computer security program, and that 

the agency’s financial management system receives an unqualified opinion in its annual financial audit. 

Office of Budget and Financial Management 

The OBFM administers the Commission's financial management program and is responsible for providing 

advice on optimal utilization of the Commission's fiscal resources. 

Looking Back: 2005 

• In FY 2005, OBFM coordinated and prepared the FY 2006 Congressional Budget and the FY 2007 OMB 

budget request, prepared a multitude of financial reports. 

• In FY 2005, OBFM satisfied E-Travel initiatives by migrating to a new electronic travel application. 

• In FY 2005, the Office began consolidating all financial functions within a single database to ensure relevancy 

and completeness of financial data and records. 

Chapter Two 

 PROGRAM PERFORMANCE 
 30 

 Management’s Discussion and Analysis FY 2005 

Looking Ahead: 2006 

• In FY 2006, the Office will strive to ensure that the agency’s financial management system receives an 

unqualified opinion in its annual financial audit. 

Office of Human Resources 

The OHR plans and administers a complete human resources management program. 

 

Looking Back: 2005

• Conducted a comprehensive training program in accordance with the agency’s strategic and performance plans 

including developing policy and procedural guidance related to the acquisition of training. 

• Explored opportunities available for developing an Emerging Leaders program, and promoted e-learning and 

on-line training opportunities. 

Looking Ahead: 2006 

• In FY 2006, the Office will implement Homeland Security Presidential Directive No. 12, the new Government 

identification card program. 

Office of Information Technology 

 

The OIT provides management support with respect to information technology to the program and administrative 

operations of the Commission, and thus is responsible for ensuring that the Commission’s IT program is 

administered in a manner consistent with applicable rules, regulations and guidelines. 

Looking Back: 2005

• Upgraded the Commission’s network infrastructure, network security infrastructure, and increased network 

bandwidth. 

• Improved the policies and procedures associated with the technical assistance provided to FMC staff and 

changes in the IT infrastructure. 

• Completed the rewrite of the Internet-based Service Contract Filing System. 

• Developed an FMC Enterprise Architecture. 

• Reviewed the FMC’s applications and completed security assessments for each. 

Looking Ahead: 2006 

• Complete corrective actions on two material weaknesses related to IT. 

• Establish and test the COOP disaster recovery site. 

Chapter Two 

 PROGRAM PERFORMANCE 
 FY 2005 FEDERAL MARITIME COMMISSION 

 31 

Office of Management Services 

The OMS is responsible for procuring and furnishing all supplies, equipment and services necessary and required 

to support the day-to-day operations and overall mission objectives of the Commission. 

Looking Back: 2005

• Coordinated the realignment of headquarters personnel within existing office space. 

• Enhanced physical security to address a Department of Homeland Security (“DHS”)/Federal Protective 

Service (“FPS”) headquarters building assessment. 

• Revised emergency preparedness manuals for all agency personnel in accordance with the office space 

adjustments. 

Looking Ahead: 2006 

• Design a more efficient office space layout for agency personnel pursuant to the agency’s realignment. 

• Enhance the agency’s COOP Plan. 

• Provide support in the implementation of Homeland Security Presidential Directive No. 12, the new 

Government identification card program. 

Chapter Two 

 PROGRAM PERFORMANCE 
 32 

 Management’s Discussion and Analysis FY 2005 

Chapter Two 

 PROGRAM PERFORMANCE 

Annual Performance Report 

Introduction 

The Commission has prepared the following Annual Program Performance Report for FY 2005, as required by 

GPRA, and in accordance with OMB Circular No. A-11, Part 2. The Commission’s actual performance in FY 

2005 is compared with the projected levels of performance established in the agency’s FY 2005 Revised Final 

Annual Performance Plan (See Appendix F for a copy of the Agency’s FY 2005 Plan). 

This progress report covers the Commission’s efforts in FY 2005 to foster an equitable, secure, and market driven 

ocean transportation industry. The Commission focused on furthering its interactions with external parties to 

increase the value of its services and oversight operations, and on strengthening relationships with government 

agencies responsible for maritime security to facilitate mutual efforts to identify and address potential security 

threats. This includes improving communication with the media, industry representatives, and other stakeholders to 

increase public awareness of Commission programs and policies, and to help address concerns before they become 

problems. In addition, we broadened our efforts to implement the President’s Management Initiative to expand 

electronic government. We improved the management of information by utilizing technology to streamline and 

simplify the delivery of services and information to regulated entities, other government agencies, and the public, 

and we created more sophisticated databases to allow staff to more effectively identify regulated activities, 

complaints, and potential abuses. Also, we implemented an IT Capital Planning Investment Control Process for the 

agency’s major IT investments. 

We achieved overall success in reaching our stated goals and objectives -- accomplishing most and exceeding 

several. We continue to find that the planning and direction required by the GPRA process facilitates our efforts to 

attain results-driven objectives. 

We have forwarded this report to the President, with a copy to the Director, OMB, and appropriate Congressional 

committees. Additionally, we have placed this document on our Internet website to ensure that it is readily 

accessible to interested parties, and have advised all Commission employees to take the time to review it. 

We have sought to be direct and concise in the manner in which we are presenting the relevant information. For 

organizational purposes, and to facilitate review, this report reflects our revised mission statement, and briefly 

summarizes it. We then list the Strategic Goals we have identified as crucial to accomplish our mission. Our 

agency Performance Goals now are linked directly to our Strategic Goals instead of our Budget Program 

Activities, as they were in past years. While our FY 2005 Revised Final Annual Performance Plan contains 

specific Performance Goals, many of the Commission’s resources were dedicated to its various day-to-day 

activities. These steady state activities are not specifically addressed in this Report, as they are discussed in full in 

other documents, such as the agency’s Annual Report and President’s Budget. Instead, this Report focuses on the 

agency’s annual Performance Goals and how they were achieved. Thus, we have organized this report by the five 

Strategic Goals under which we operated in FY 2005. For each of these Goals, we state the Performance Goals 

that are directly related to them. We then state the target level of performance for each Performance Goal, and our 

actual level of performance regarding that Goal. For any Performance Goal that was not met or not substantially 

completed, we have provided a specific explanation why the Goal was not met, along with the actions and schedule 

for meeting the Goal in the future. Additionally, the last section of this report identifies the Performance Goals 

from our fiscal years 2003 and 2004 Program Performance Reports which we previously reported as not having 

been accomplished or substantially completed, and explains the actions we subsequently took regarding the 

requirements of each such Goal. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 33 

Chapter Two 

 PROGRAM PERFORMANCE 

The Commission acknowledged in its 2003 Strategic Plan that the basic principles of liner shipping were being 

modified, as the shipping industry continued to restructure itself while shippers were placing an increasing 

importance on rates and services. Given the significant issues the agency was facing, in 2003 it identified the 

actions necessary to ensure that its oversight and legislative initiatives produced a competitive and 

nondiscriminatory trading environment in the U.S. ocean commerce that was in harmony with and responsive to 

international shipping practices. During 2004, the Commission built on that analysis and focused its energies and 

efforts on re-evaluating its organizational structure to ensure that it was aligned and managed in a manner best 

suited to accomplish its mission with a minimum of government intervention and regulatory costs. In 2005, the 

Commission focused on staff and program issues, and emphasized outreach for a more open dialogue with our 

industry partners and stakeholders in light of the changing dynamics of the ocean shipping industry. As part of this 

process, we launched a redesigned and restructured agency website in order to meet the challenges of automation 

in a way which will facilitate the industry’s ability to conduct business with the FMC. 

FMC Strategic Goals 

In recognition of its stated mission, and in conformity with the Shipping Act, the FMC established the following 

five strategic goals: 

1. Efficient Regulatory Process: Provide a timely, efficient and decisive regulatory process, including alternative 

dispute resolution, to enable all segments of the industry to operate more effectively, with a minimum of 

regulatory costs. 

2. Compliance: Promote efficiency and fairness in U.S. foreign waterborne commerce through various means, 

including outreach and monitoring, to protect the public and assist stakeholders in achieving compliance with 

ocean transportation statutes administered by the FMC. 

3. Balanced Enforcement: Foster economic efficiencies, reliance on marketplace factors and maritime security 

by administering U.S. shipping statutes in a balanced and equitable manner to redress anticompetitive actions 

and other unlawful activities. 

4. Technological Efficiencies: Employ technological enhancements to improve efficiency and to facilitate the 

exchange of information. 

5. Management Capabilities: Ensure the FMC has the appropriate organizational framework and management 

systems to carry out its statutory mandates. 

These strategic goals addressed all important FMC statutory, programmatic, and management responsibilities. 

They were developed with a specific focus on accomplishing the basic thrusts of our mission. The Commission 

determined that achieving its mission-driven goals would enable it to address effectively the external factors it 

faced, while assuring an equitable and efficient administration of the shipping statutes under its jurisdiction. 
 34 

 Management’s Discussion and Analysis FY 2005 

Chapter Two 

 PROGRAM PERFORMANCE 

Progress in Achieving Performance Goals 

The Performance Goals of the Commission’s FY 2005 Revised Final Annual Performance Plan were linked 

directly to the Commission’s Strategic Goals; they were identified as the appropriate means for accomplishing our 

mission. This section of the report assesses our actual performance in addressing these Goals. 

Strategic Goal: Efficient Regulatory Process 

Provide a timely, efficient and decisive regulatory process, including alternative dispute resolution, to enable all 

segments of the industry to operate more effectively, with a minimum of regulatory costs. 

Performance Goal 1: 

Promote the use of ADR to potential users and provide conflict resolution training to Commission managers. 

Progress: During the fiscal year, the Commission’s Dispute Resolution Specialist met with a number of industry 

representatives concerning the Commission’s ADR program. For example, in March of 2005, he addressed 

members of the National Customs Brokers & Forwarders Association of America at its national conference. At 

that meeting, he described and stressed the benefits of the Commission’s ADR services, including the Ombuds 

services, provided by the agency’s responsible Office (CADRS). CADRS can assist the public and regulated 

parties to resolve problems with carriers, cruise operators, OTIs, and other industry participants in a more 

economical manner. CADRS staff also provided training to agency personnel through an in-house seminar. This 

seminar was in addition to the many discussions that took place during the fiscal year with senior staff regarding 

the possible use of ADR, mediation, and ombudsman services for specific issues or cases before the agency. 

Performance Goal 2: 

Develop options for updating and modernizing the Commission’s Rules of Practice and Procedure, including 

exploring the ability to utilize technology for electronic filing. 

Progress: During the fiscal year, the agency’s OS solicited and collected recommendations from the Commission’s 

legal offices (OGC, ALJs, and BOE) for updating and modernizing the Commission’s Rules of Practice and 

Procedure (46 CFR 502), and for accepting certain filings with the Commission in electronic form. Preliminary 

discussions were held but further effort on this initiative was shelved due to the need to use limited Commission 

resources on other, more pressing initiatives such as re-designing the Commission’s website, participating in the 

Commission’s OTI Task Force, development of strategies concerning issues arising in the household goods 

market, etc. The Commission has been in the process of reassessing its program focus and processes since its 

August 2004 re-alignment. Since realignment of Commission programs and processes will likely effect how and 

what types of proceedings are conducted, no definite target date or schedule for re-instituting this initiative has 

been established. It is anticipated that once the Commission has completed its internal assessment of programs and 

processes, this initiative will be re-instituted. In the meantime, the Commission and ALJs have permitted the use of 

electronic filing in formal proceedings on an ad-hoc basis. 

Performance Goal 3 

Develop an automated FMC-18 to permit electronic filing and explore feasibility of electronic payment and esignature capability. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 35 

Chapter Two 

 PROGRAM PERFORMANCE 

Progress in Achieving Performance Goals (continued) 

Progress: While the Commission has not completed this goal, substantial progress has been made in determining 

user needs and defining system requirements. The Commission’s OIT has contracted for software development 

services needed to update and incorporate existing paper-based procedures and assumptions used in performing 

analysis of the Form FMC-18 licensing applications into the requirements for an automated Form FMC-18 system 

that permits electronic filing by the public. The automated Form FMC-18 system is anticipated to be implemented 

in phases throughout FY 2006, with electronic filing first authorized in the winter of 2006. Electronic payment 

options and e-signatures will be added in subsequent releases upon identification of an appropriate service partner 

for e-payments and review of legal issues relating to use of e-signatures for certification purposes. It is anticipated 

these changes will permit a more thorough review of applications, decrease costs and increase productivity. 

Strategic Goal: Compliance

Promote the development of U.S. exports and the efficiency of ocean shipping by monitoring and assisting 

stakeholders in achieving compliance with shipping statutes administered by the FMC. 

Performance Goal 1: 

Develop public relations strategies and programs. 

Progress: In FY 2005, the Commission began what will be an ongoing effort to enhance relations with the 

public. Early in the year, OPS and OS compiled a list of ongoing and new public relations and outreach 

initiatives. These were linked to agency strategic objectives and assigned to the appropriate offices for 

oversight. One particular undertaking initiated in FY 2005 was the publishing of public service announcements 

targeted at private citizen shippers, warning about the use of unlicensed OTIs and the risk of cargo loss. This 

program will continue in FY 2006. For example, in March of 2005, the Commission’s Dispute Resolution 

Specialist addressed members of the National Customs Brokers & Forwarders Association of America at its 

national conference. At that meeting, he described and stressed the benefits of the Commission’s ADR services, 

including the Ombuds services, provided by the agency’s responsible Office (CADRS). As well, Commission 

Area Representatives manned a booth at an industry conference as a pilot effort toward building the Commission’s 

capacity for participation in such events. Current educational and informational materials were distributed to a 

receptive audience. Renewed emphasis has been placed on Commission presence at industry events and 

conferences toward ensuring a constant presence for the benefit of the shipping public. This goal is substantially 

complete, but work will continue into FY 2006 to further formalize an efficient and effective public relations 

strategy. 

Performance Goal 2: 

Enhance industry outreach. 

Progress: During the fiscal year, Commission staff researched companies that develop and produce trade show 

materials and visited a local vender to explore presentation tools to be used at conferences, in-house seminars, and 

other forums. These materials will be used as a means to better communicate Commission oversight 

responsibilities and available services, as well as how the Commission can be of assistance to industry participants 

in meeting their regulatory responsibilities. Commission staff also met with other government agencies such as the 

Bureau of the Census, Department of Commerce to discuss options for partnering for mutual outreach initiatives 

and sharing resources. In addition, the Commission initiated a series of seminars/briefings for agency staff by 

representatives of the shipping industry and maritime community, including shippers, carriers, marine terminal 

operators, OTIs, freight forwarders, and cruise lines. The briefings are intended to foster a greater awareness and 

understanding of the current issues and concerns affecting the various interests involved in the U.S. foreign 

commerce. Further, senior Commission staff met and conducted an analysis of the Commission’s outreach 

strategies, and is in the process of developing and implementing a plan based on that analysis. This Performance 

Goal is closely related to the Commission’s performance goal to “Develop public relations strategies and 

programs” and therefore, while it is substantially complete, work will continue into FY 2006 to further formalize 
 36 

 Management’s Discussion and Analysis FY 2005 

Chapter Two 

 PROGRAM PERFORMANCE 

Progress in Achieving Performance Goals (continued) 

Performance Goal 3: 

Provide opportunity for VOCCs to establish a “best practices” program to limit participation of unlawful entities in 

ocean transportation. 

Progress: The original goal of providing an opportunity for VOCCs to establish a “best practices” program was 

revised and expanded in FY 2005. As one component, all carriers, NVOCCs as well as VOCCs, are being 

encouraged to develop and implement effective practices and procedures to deny carrier services to noncompliant 

OTIs. The principle tenets of an effective carrier program, together with model provisions, will be published on 

the Commission’s web site and publicized through compliance and outreach efforts in FY 2006. 

Strategic Goal: Balanced Enforcement 

Foster economic efficiencies, reliance on marketplace factors and maritime security by administering U.S. shipping 

statutes in a balanced and equitable manner to redress anticompetitive actions and other unlawful activities. 

Performance Goal 1: 

Contact and educate consumer protection agencies on the state and local government level regarding Commission 

programs and remedies to protect and assist the public from the unlawful activities of transportation providers and 

intermediaries. 

Progress: During the fiscal year, CADRS staff met with representatives from STB and the FMCSA to discuss 

issues concerning possible remedies to protect and assist the public from the unlawful activities of transportation 

providers and intermediaries involved in the international movement of personal household goods. These 

discussions have been very productive and have resulted in effective cooperation among the agencies. Also, the 

Commission has partnered with the FMCSA with respect to outreach and providing information to the public on 

protecting their household goods shipments. CADRS staff also has cooperated with federal and state law 

enforcement authorities in their investigations of malpractices in the household goods industry. Additionally, 

CADRS staff held discussions with consumer protection representatives from various states, specifically 

establishing an ongoing relationship with the State of Florida, a state which has seen a significant number of 

household goods shipment problems. 

 

Performance Goal 2: 

By June 30, 2005, redesign internal agreement database to enable more efficient oversight of agreement activities. 

Progress: The redesign of the internal agreements database was completed ahead of schedule, on March 21, 2005, 

and is consistent with this Performance Goal. The project was initiated and completed to enable more efficient 

oversight of agreement activities and competitive trade conditions. In completing this redesign, the agency 

conducted an audit of all effective carrier agreements to identify the various agreement authorities contained in 

each. The agreement records in the database were updated to capture all relevant authorities. A new report 

functionality and an expanded lookup table were developed to identify agreements with specific authorities, 

particularly those affecting competitive conditions and that may have potential to distort markets. As a result of 

the redesign of this system, the agency can more efficiently and expeditiously generate reports that identify those 

agreements that are most likely to have a competitive impact on U.S. trade lanes. 

Performance Goal 3: 

Review results of major enforcement actions (e.g., those targeted at anti-competitive practices of ports and ocean 

common carriers) during the past three years to assess effectiveness of remedies. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 37 

Progress in Achieving Performance Goals (continued) 

Progress: This goal was achieved by reviewing and reporting on the six enforcement actions which targeted anticompetitive practices of ports and ocean common carriers during the three-year period 2002 through 2005. During 

the course of this review, the agency’s BOE, along with its BTA, examined the records pertaining to each 

enforcement action and analyzed the corresponding reports, minutes, and activities of the entities involved with 

respect to implementation of agreed provisions and continued compliance by affected entities. The review also 

included a current survey of the markets affected by the proceedings. 

Performance Goal 4: 

Develop additional relationships with other agencies with responsibilities related to maritime security, including 

DHS, DOT and intelligence agencies. 

Progress: We continue to reach out to other agencies, including DHS, DOT and intelligence agencies, to discuss 

information sharing and other possible FMC contributions with regard to identifying potential security threats 

related to the maritime industry generally. In particular, the agency has an MOU with CBP. The agency is also an 

active participant in the development of CBP’s ACE/ITDS, which proposes to capture, and then integrate, the data 

needs and timing requirements of all licenses, permits and certificates required by CBP and other participating 

government agencies. Commission representatives participating in the ACE/ITDS business process are working 

with CBP and its e-Customs Partnership consultants to ascertain how the Trade Act requirements, and equivalent 

1984 Act mandates, can be integrated into the ACE system to assist CBP in identifying compliant NVOCCs. 

Strategic Goal: Technological Efficiencies 

Employ technological enhancements to improve efficiency and to facilitate the exchange of information. 

Performance Goal 1: 

Enhance the reliability and efficiency of SERVCON by ensuring that filers use proper electronic document file 

names to identify each SC submission. In addition, implement other changes to flag contract documents 

transmitted into the SERVCON system with problems, e.g., retroactive effective date. This performance goal is 

being modified to accelerate the streamlining and usefulness of the system for anticipated short- and long-term 

growth. 

Progress: This Performance Goal has been achieved. Enhancements to SERVCON, the Commission’s Internetbased service contract filing system, have been made to ensure that contracts submitted are properly filed and that 

the data filed is in a format that is useful for the Commission’s oversight purposes. Enhancements were made to 

the validity checks feature contained in SERVCON to flag service contract documents filed with errors, such as a 

retroactive effective date and invalid organization number. A list of any such filings can be obtained from reports 

generated from the SERVCON system. Further, any contract document submitted without a proper electronic 

document file name or amendment number is not accepted for filing in SERVCON. When this occurs, the filer 

receives an error message and must correct the problem before attempting to resubmit the contract. The 

SERVCON system has been brought in-house and additional changes have been made to improve its search 

capability and overall performance. For example, a new SQL Server search engine is being used to increase the 

speed and reliability of search results. In connection with this, historical contract documents filed in SERVCON 

between April 1999 through December 31, 2001, have been archived and are available via other electronic media. 

Numerous other enhancements are being developed which will further accelerate the streamlining and usefulness 

of the system for the anticipated short- and long-term growth of filings of both service contracts and NVOCC 

Service Arrangements. For example, the menu selection screens are being realigned in the system to be more user 

friendly allowing agency staff to sort contract documents by organization and contract numbers, as well as 

effective dates of original contracts and filer names. 

Chapter Two 

 PROGRAM PERFORMANCE 
 38 

 Management’s Discussion and Analysis FY 2005 

Progress in Achieving Performance Goals (continued) 

Performance Goal 2: 

Assure that 95 percent of the security on agency systems is in conformance with Administration and Congressional 

mandates. 

Progress: The FMC has upgraded all network security tools over the last year and most systems requiring security 

have been enhanced. Over 95 percent of agency systems are in conformance with Administration and 

Congressional mandates. During the fiscal year, the FMC incorporated security into the FMC 

infrastructure. Personnel and technical controls were established to improve the integrity, availability, and 

confidentiality of FMC information. The agency has put in place processes and controls that complement the 

FMC’s business operations. These same controls and processes have been developed and implemented following 

OMB policies, NIST guidance, privacy policies, and other policies and mandates. 

Performance Goal 3: 

Analyze the current FMC Internet website and develop a plan to create a more efficient and comprehensive design. 

 

Progress: During the fiscal year, the Commission exceeded this goal. Not only did the Commission analyze its old 

website and develop a plan to re-design the site, a team of Commission staff were assembled and met throughout 

the fiscal year and worked with an outside contractor to create a new, more efficient, comprehensive and citizencentered website. The Commission launched its new website on August 18, 2005. The look and functionality of 

the new website is significantly different from the Commission’s old site, and most of the information from the old 

site was reorganized and updated to improve transparency and flow of information. Content was organized by 

areas of interest and by regulated entity, making it easier to find information. 

Strategic Goal: Management Capabilities 

Ensure the FMC has the appropriate organizational framework and management systems to carry out its statutory 

mandates. 

Performance Goal 1: 

Implement an IT CPIC process for the Commission’s major IT investments. 

Progress: The FMC has implemented an IT CPIC process. Serving as the CPIC control board, the FMC’s SES 

officials are responsible for ensuring that all major IT investments fall within the goals of the agency and will 

support the needs of internal and external users. All major IT investments are presented to the CPIC/SES by the 

CIO for review and approval of funding and staff resources, with a final approving decision required from the 

Chairman before any IT projects can be initiated. 

Performance Goal 2: 

Complete implementation of strategic linkage of agency planning, budgeting and performance. 

Chapter Two 

 PROGRAM PERFORMANCE 
 FY 2005 FEDERAL MARITIME COMMISSION 

 39 

Progress in Achieving Performance Goals (continued) 

Progress: The agency was very successful in completing its objective of linking planning, budgeting, and 

performance as part of its everyday business model. Building on our recent past efforts, we appropriately aligned 

these activities in FY 2005. For the first time, we conducted an agencywide analysis of our strengths, weaknesses, 

opportunities, and threats (SWOTs), so as to identify necessary actions and desirable initiatives, along with 

budgeting needs to accomplish same. All budget planning, decision-making, and actions then were predicated on 

meeting our established agency priorities, as opposed to singular unit goals. Resource allocations (FTEs, 

equipment, IT, etc.) were considered jointly by senior management, who made recommendations to the Chairman 

for the most effective deployment in line with our established performance goals. Planning meetings were 

expanded to include Deputy Directors, to broaden our perspectives and help cascade down all operational 

approaches and policy changes. Finally, we undertook a wholesale review of our performance management system 

so as to ensure that it was a useful tool for developing employees, guiding careers, and assessing agency and 

employee progress in achieving stated objectives. We plan to culminate this effort in FY 2006 with a refined and 

simplified system that clearly conveys expectations, can be easily administered, and further ties performance to our 

planning and budgeting. Our success in aligning these activities has facilitated accomplishment of our statutory 

mission, and established a business process that enables us continually to enhance performance and produce 

positive, meaningful results. 

FY 2003 and 2004 Performance Goals Not Achieved 

Prior to FY 2005, Performance Goals were listed by Budget Program Activity rather than by Strategic Goal. 

This section discusses the goals from our FY 2003 Annual Performance Plan which we reflected in our FY 2003 

Progress Report as not achieved or not substantially completed. We explain in this section the actions we have 

taken to address these goals. 

Performance Goal 3 (Certification and Licensing Program Activity) 

Enhance informal complaint database to include more specific details on type of complaints against cruise 

operators. 

Progress: After a number of attempts to modernize the existing informal complaint database, it was determined that 

it would be more productive to design a completely new database using more modern software. The initial design, 

query and reports capability was completed and a pilot begun in September 2005. The pilot database currently is 

being tested and evaluated. Initial results from the testing phase have resulted in a number of system modifications 

including adding additional query and reporting features for the users. It is expected that the system will be fully 

operational (incorporating necessary enhancements) in the near future. We plan to reevaluate the system after an 

appropriate period, and modify programming as the system is being used. 

 

Performance Goal 1 (Trade Analysis Program Activity) 

By 12/31/02, further develop and apply updated ocean carrier constructive costs benchmark to be taken into 

account in analyses of controlled carrier rate activity under section 9 of the 1984 Act, as amended by OSRA. 

Progress: This Performance Goal has been completed. As reported in the Commission’s Annual Program 

Performance Report for FY 2004, the staff prepared a proposed revised controlled carrier monitoring program that 

included a suggested methodology for deriving and validating the constructive costs of a controlled carrier. Over 

FY 2005, the staff re-examined its updated constructive costs benchmark methodology and ensured that 

developments in FY 2004 relating to those carriers that are classified as controlled were accounted for in the 

proposal. 

Chapter Two 

 PROGRAM PERFORMANCE 
 40 

 Management’s Discussion and Analysis FY 2005 

Progress in Achieving Performance Goals (continued) 

This section discusses the goals from our FY 2004 Annual Performance Plan which we reflected in our FY 2004 

Progress Report as not achieved or not substantially completed. We explain in this section the actions we have 

taken to address these goals. 

Performance Goal 1 (Certification and Licensing Program Activity): 

By 9/30/04, modernize the FMC’s RPI database. 

Progress: While the Commission has not completed this goal, it has made substantial progress towards 

implementing an updated RPI database system. A beta version of the modernized RPI is now in testing. The 

modernized RPI system will be completed and placed in operation during the first half of FY 2006. 

Performance Goal 2 (Certification and Licensing Program Activity): 

Complete a rulemaking by 9/30/04 that makes the changes necessary to ensure that PVOs’ financial responsibility 

requirements for nonperformance are providing appropriate protection for the public. 

Progress: Commission staff met on a number of occasions in FY 2005 to discuss the status of the proposed rule and 

concerns raised by stakeholders in the public comments received in response to the rulemaking. In an effort to 

identify alternative options and approaches to assess the level of financial coverage needed to protect cruise 

passengers, the staff has conducted additional analysis of financial information related to certain cruise lines’ 

operations, as well as other benchmark financial indicators. Staff efforts will remain ongoing as the Commission 

continues its pursuit of an updated Rule that ensures appropriate PVO financial responsibility without undue 

financial costs upon the cruise industry. 

Chapter Two 

 PROGRAM PERFORMANCE 
 FY 2005 FEDERAL MARITIME COMMISSION 

 41 

Chapter Two 

 PROGRAM PERFORMANCE 

Addressing the President’s Management Agenda 

Overview 

The President’s Management Agenda is comprised of five Government-wide initiatives to improve Government 

performance in 1) strategic management of human capital, 2) budget and performance integration, 3) competitive 

sourcing, 4) expanded electronic government, and 5) improved financial management. The FMC has made strides 

in a number of these areas. 

Strategic Management of Human Capital 

In the last quarter of FY 2004, the FMC implemented a realignment to improve operations and to more effectively 

and efficiently implement the agency’s strategic goals. These changes included a realignment of staff, including 

changes in the FMC’s organizational structure. 

The FMC offers a range of flexible work options and employee-friendly and family-friendly programs and 

policies. These programs include transit subsidies, employee assistance, and adjustable work schedules, among 

others. Managers are encouraged to review their staff’s critical skills and to target training to improve expertise. 

The FMC recently initiated a policy of reimbursing employees up to a certain dollar threshold for college classes 

which will improve skills needed in the workplace. 

The FMC’s recruitment practices utilize a wide range of alternatives such as those under the Direct-Hire Authority, 

delegated examining, and the Veterans Employment Opportunities Act, and the agency administers action on eGovernment initiatives such as Recruitment One-Stop, e-payroll, Enterprise Human Resources Integration, and elearning. 

Budget and Performance Integration 

The FMC continues to make progress in achieving budget and performance integration. The Strategic Plan and 

Annual Performance Plan represent the fundamental framework for the agency’s planning and budgeting activities. 

In the FMC’s FY 2005 Performance Plan, performance goals were aligned with the agency’s strategic goals for the 

first time, a major change from previous plans which aligned performance goals by agency program. Funding and 

FTE levels also were integrated into the performance planning document by strategic goal, to identify clearly the 

budgetary and staff resources that are devoted to each goal. 

FMC program managers currently receive reports which show the full cost of their programs. These reports allow 

managers to plan and manage their programs better throughout the budget year. 

Competitive Sourcing 

The FMC is committed to acquiring goods and services in an efficient manner. The FMC submitted its FY 2005 

Federal Activities Inventory Reform Act Inventory to OMB in June 2005. The Inventory identifies 78 of the 

agency’s 133 FTEs as commercial activity FTEs. No challenges to its commercial inventories have ever been 

received. 

The Commission is a very small agency whose personnel perform many different activities. The number of FTEs 

has declined from 199 in 1993 to 133 in 2005. One way in which the Commission has been able to streamline and 

improve efficiencies is by committing budgetary resources to a variety of contracts for support services, including 

interagency/cross-service and commercial agreements for payroll, accounting, human resources processing, travel, 

health, excessing property, security guard, transit benefits, office space rent, messenger, and equipment 

maintenance services. 
 42 

 Management’s Discussion and Analysis FY 2005 

Chapter Two 

 PROGRAM PERFORMANCE 

Competitive Sourcing (continued) 

The Commission determined that a core component of in-house resources are needed for the Commission to carry 

out its statutory responsibilities. It is essential that the Commission, as an independent agency with regulatory 

responsibilities, has a core group of technically qualified individuals to monitor, analyze and investigate conditions 

in the U.S. foreign commerce and activities of the maritime industry. It also is critical that the agency has sufficient 

in-house staff that are knowledgeable and impartial in their dealings with foreign governments, the industry, 

Congress and other Government agencies. Therefore, the Chairman made the determination, as in years past, to list 

those 78 FTEs as exempt from competition (Reason Code A), i.e., the commercial activities are not appropriate for 

private sector performance. 

The Commission is committed to improving and streamlining operations to carry out its mission and strategic 

goals, as is proven by its decreasing FTEs over a period of years. 

Expanded Electronic Government 

The FMC has planned and continues to implement the expansion of electronic government. A major 

accomplishment during FY 2005 was the unveiling of the agency’s new, expanded, updated and more user-friendly 

public website. This project has significantly improved the effectiveness of the website and the efficiency with 

which users can navigate and access needed information and obtain the services they need. By redesigning the 

website, the FMC has improved one avenue of communications with the public and its stakeholders. 

Senior managers are aware of the requirements and benefits of electronic government and are planning and 

initiating program changes to incorporate the expanded use of electronic government in day-to-day activities. The 

FMC has instituted an information technology security training and awareness program; all employees are required 

to complete an online information technology security refresher course on an annual basis. In FY 2005, the FMC’s 

SERVCON system was re-written to provide greater functionality and increased security features. Network and 

security upgrades were effected to provide an upgraded platform for the delivery of electronic services to agency 

staff and stakeholders. 

In FY 2004 and FY 2005, the FMC committed the resources necessary to stabilize and improve its network 

infrastructure and security, to improve its information technology services to FMC staff, to formalize numerous 

documents related to security, and to generally improve the information technology program, as a core requirement 

for the ongoing efforts to upgrade and improve the FMC’s posture to address e-government initiatives. The FMC 

developed its Enterprise Architecture to formally define its IT functionality. The FMC has implemented a Capital 

Planning and Investment Control process, and has formalized its Systems Development Life Cycle process. The 

FMC is committed to continuing its integration of these information technology policies and procedures, and to 

continuing to expand opportunities for e-government activities. In so doing, the FMC mitigated a material 

weakness identified in an earlier FMFIA Report. In FY 2005, the FMC continued to implement corrective actions 

to maintain compliance with the Federal Information Security Management Act (“FISMA”). Two material 

weaknesses which were identified during a FISMA audit in a previous fiscal year were addressed during FY 2005, 

with significant progress being made in each instance to formally correct them. 

Improved Financial Performance 

The FMC received an unqualified opinion on its financial statements in FY 2005, for the second straight year. The 

FMC will continue to strive to achieve unqualified audit opinions. 

In support of the e-government initiative, the FMC has interagency agreements with the BPD to provide generalledger accounting, travel, procurement and financial reporting services, and the NFC to provide payroll services. 

Our current systems satisfy operational and reporting requirements and provide timely, accurate and useful 

information to the agency. The FMC’s systems are in substantial compliance with Federal laws and regulations. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 43 

CHAPTER THREE

AUDITORS’ REPORTS AND FINANCIAL 

STATEMENTS 

Fiscal Year 2005 
 43 

 Management’s Discussion and Analysis FY 2005 

Message from the Chief Financial Officer 

I am pleased to present the FMC’s financial statements for FY 2005. Our 

independent auditor has rendered an unqualified opinion on our FY 2005 

financial statements. The FMC now has received an unqualified opinion in 

each of the two years in which independent financial audits have been 

conducted, which attests to the FMC’s commitment to high quality 

financial management. 

The FMC’s financial condition is sound with respect to having sufficient 

funds to meet its mission and having sufficient internal controls in place to 

ensure its budget authority is not exceeded. 

The Chairman of the FMC has streamlined our business processes and 

more fully integrated senior managers into the budget planning and 

execution process, as well as developed greater management accountability 

within the context of a collaborative strategic planning process. Through 

these efforts and the teamwork of program, financial management, and 

audit staff, we continue to be successful in achieving our goals and ensuring that our operations provide timely and 

reliable information that is used to promote results, accountability, and efficiency. For FY 2005, corrective actions 

were completed on a number of recommendations and closed. Quarterly financial statements were issued 15 days 

after the end of the quarter, and our FY 2005 Performance and Accountability Report is being published on 

November 15, 2005. 

As reported more fully in Chapter 1 in the section entitled Federal Managers’ Financial Integrity Act, the 

Commission has two open material weaknesses for which final corrective action is planned for the near future. We 

anticipate no major impediments to the correction of those weaknesses. 

The FMC is committed to effective and efficient management of agency resources. Our strategies for improving 

financial management are centered on maintaining an unqualified audit opinion and eliminating remaining material 

weaknesses. 

I anticipate that in FY 2006 the FMC will continue its high level of quality financial management, and that we will 

repeat our past success. 

Sincerely, 

Bruce A. Dombrowski 

November 15, 2005 

Chapter Three 

 AUDITORS’ REPORTS AND FINANCIAL STATEMENTS 
 FY 2005 FEDERAL MARITIME COMMISSION 

 44 

Chapter Three 

 AUDITORS’ REPORTS AND FINANCIAL STATEMENTS 

PRINCIPAL STATEMENTS 

LIMITATIONS OF THE FINANCIAL STATEMENTS 

The principal statements have been prepared to report the financial position and results of operations of the FMC, 

pursuant to the requirements of the Chief Financial Officers Act of 1990, as amended by the Government 

Management Reform Act of 1994. These statements have been prepared from the books and records of the FMC in 

accordance with the formats prescribed by the Office of Management and Budget. However, these statements 

differ from the financial reports used to monitor and control budgetary resources that are prepared from the same 

books and records. The principal statements should be read with the realization they are for a component of the 

U.S. Government, a sovereign entity. Liabilities not covered by budgetary resources cannot be liquidated without 

the enactment of an appropriation, and the payment of all liabilities other than for contracts can be abrogated by the 

sovereign entity. Other limitations are included in the footnotes to the principal statements. The accompanying 

notes are an integral part of these statements. 

The Federal Maritime Commission’s financial statements were audited by Clifton Gunderson LLP, under contract 

to the FMC’s Office of the Inspector General.
 45 

 Management’s Discussion and Analysis FY 2005 

Chapter Three 

 AUDITORS’ REPORTS AND FINANCIAL STATEMENTS 

Independent Auditor’s Report 
 FY 2005 FEDERAL MARITIME COMMISSION 

 46 

Chapter Three 

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Independent Auditor’s Report (continued) 
 47 

 Management’s Discussion and Analysis FY 2005 

Chapter Three 

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Independent Auditor’s Report on Compliance with Laws and Regulations 
 FY 2005 FEDERAL MARITIME COMMISSION 

 48 

Chapter Three 

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Independent Auditor’s Report on Compliance with Laws and Regulations (continued) 
 49 

 Management’s Discussion and Analysis FY 2005 

Chapter Three 

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Independent Auditor’s Report on Internal Controls 
 FY 2005 FEDERAL MARITIME COMMISSION 

 50 

Chapter Three 

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Independent Auditor’s Report on Internal Controls (continued)
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 Management’s Discussion and Analysis FY 2005 

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Chapter Three 

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 Management’s Discussion and Analysis FY 2005 

Appendix A 

 Inspector General’s Assessment of the Most Serious Management Challenges Facing the FMC 

Management Challenges Facing the FMC 

FEDERAL MARITIME COMMISSION

800 North Capitol Street, N.W.

Washington, DC 20573

 

Office of the Inspector General 

 

October 4, 2005 

MEMORANDUM 

TO : Chairman Blust 

FROM : Bridgette S. Hicks 

 Inspector General (Acting) 

SUBJECT: Inspector General’s Assessment of Management Challenges Facing the FMC 

 (A05-05) 

On January 24, 2000, Congress enacted the Reports Consolidation Act of 2000 to provide financial and 

performance management reporting to improve the efficiency of executive branch performance. These reports are 

combined in the Performance and Accountability Reports (PAR) which consists of the Annual Performance Report 

required by the Government Performance and Results Act (GPRA) with annual financial statements and other 

reports, such as agencies’ assurance on internal controls, accountability reports by agency heads and Inspector 

Generals’ assessment of the agencies most serious management and performance challenges. 

The PAR should include a statement prepared by the agency’s Inspector General (IG) that summarizes what the IG 

considers to be the most serious management and performance challenges facing the agency and briefly assesses 

the agency’s progress in addressing those challenges. 

In 2004, the Federal Maritime Commission (FMC) submitted its first PAR, in which the IG stated that its 

management challenges were the following: 

Information Technology, 

Financial Management, and 

Contract Management. 

These challenges parallel the President’s Management Agenda (PMA) and remain the same for this reporting 

period. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 70 

Appendix A 

 Inspector General’s Assessment of the Most Serious Management Challenges Facing the FMC 

The most serious management challenges that follow are not ranked in any order of importance. 

Challenge 1 – Information Technology 

The FMC’s information technology systems and the data they contain are used by staff and entities engaged in the 

ocean borne industry. The Bureau of Trade Analysis (BTA) reviews agreements and monitors the concerted 

activities of common carriers by water under the standards of the Shipping Act of 1984. Entities engaged in the 

industry include: Vessel Operating Common Carriers (VOCCs), Non Vessel Operating Common Carriers 

(NVOCCs), Ocean Transportation Intermediaries (OTIs) and Marine Terminal Operators (MTO) and Conferences. 

By Federal law these entities must register with the FMC prior to the commencement of common carrier services 

pursuant to a published tariff. The Form-1 form and system is designed to collect information for registration with 

the FMC. 

The BTA and entities regulated by FMC also uses SERVCON to provide for the electronic filing, storage, and 

retrieval of service contracts. This system is only available to authorized persons filing service contract(s) data. 

This is an interconnected system in which the information is shared with other government agencies. Loss of or 

serious damage to any of these critical systems could have devastating impacts, which makes identifying 

weaknesses and recommending solutions a continuing priority for this office. 

The Federal Information Security Management Act (FISMA), signed into law on December 17, 2002, provides a 

comprehensive framework for ensuring that information resources supporting federal operations and assets employ 

effective security controls. FISMA requires Offices of Inspector General to perform independent security 

evaluations of their agencies annually. 

Our security reviews found that FMC senior management continues to give information security a top priority and 

have corrected many deficiencies previously reported. With the support of the Chief Information Officer (CIO) the 

Agency has worked hard to improve information security. During this period the FMC has corrected 55 of the 62 

previously reported deficiencies and aggressively continues to correct the remaining 7 recommendations. The 

FMC is also working to correct 2 of the 4 material weaknesses identified in a previous fiscal year. The two 

material weaknesses are that SERVCON is not configured and operating under Federal guidelines and the other 

weakness is the quality of certification and accreditation documents and security self assessments of systems. We 

commend FMC on its efforts to get a handle on the SERVCON contract and its system to ensure better information 

security. 

In FY 2005, we had an outside contractor assess FMC’s information security. The contractor found that the 

FMC’s firewall, the Exchange server, the SERVCON application server and the Web server from the Internet are 

well maintained and highly secured. The contractor also made 8 recommendations for the Agency’s information 

security systems that needed to be addressed. The Office of Information Technology has responded to each 

recommendation and has concluded that FMC has one recommendation that needs to be addressed and will be 

incorporated into FMC’s POA&M. 

Audits/Inspections 

• FY 2005 Federal Information Security Management Act (FISMA) Compliance 
 71 

 Management’s Discussion and Analysis FY 2005 

Challenge 2 – Financial Management

The Chief Financial Officers Act of 1990, the Government Performance and Results Act of 1993, the Government 

Management Reform Act of 1994 and the Federal Financial Management Improvement Act of 1996 require that 

agencies prepare information needed by Congress, agency executives, and the public to assess the management of 

federal programs and operations. 

In FY 2003, for the first time the FMC had an independent contractor reviewing its financial position and the 

balance sheet. In FY 2004, the FMC had a full financial statement audit performed by a contractor. The FMC 

received an unqualified opinion with a recommendation to follow-up with its service providers to address 

information security-related weakness identified in the third party reports. FMC management follow-up with its 

service providers and the providers reported that there wasn’t anything in the reports that impacted the FMC’s 

financial management. The continue management controls being established at the FMC are moving in the right 

direction for effective and efficient process and controls. 

Currently the FMC’s FY 2005 financial statements are being reviewed. Thus far there hasn’t been any material 

weakness that affects the FMC’s financial standing. 

Audits/Inspections 

• FY 2005 Financial Statements (ongoing) 

• Audit of Procurement of Vendor Training Services 

• Audit of Controls Over Agency Property 

• Audit of Agreement Filings 

• FY 2004 Financial Statements 

Challenge 3 – Contract Management 

With the government procuring goods and services through contractors FMC must ensure these services are in 

accordance with Federal regulations and that FMC’s staff have the skills to perform these duties. Without effective 

management controls, the procurement process is susceptible to fraud, waste, and abuse. 

In FY 2005, we reviewed the FMC’s SERVCON contract including the maintenance contract. The CIO 

recognized the issues relating to the SERVCON contract and has taken a positive approach to remedy the problems 

which includes management/procedures, information security, management oversight, and Contracting Officers 

Technical Representative oversight and cost controls. With continue support from management and management 

controls the contract process will not be susceptible to fraud, waste and abuse. 

Audits/Inspections

• SERVCON Review 

Overall, the Commission is working diligently to address these various challenges. 

Appendix A 

 Inspector General’s Assessment of the Most Serious Management Challenges Facing the FMC 
 FY 2005 FEDERAL MARITIME COMMISSION 

 72 

Appendix B 

 Actions to Address the FMC’s Management Challenges 

Actions to Address the FMC’s Management Challenges 

This appendix discusses the management challenges that the FMC’s Inspector General identified for FY 2005 in a 

memorandum to Chairman Blust, dated October 4, 2005. 

Challenge 1 - Information Technology 

As discussed earlier in the section entitled Federal Managers’ Financial Integrity Act, the Commission mitigated 

one material weakness during the fiscal year related to information technology, and has two open material 

weaknesses for which final corrective action is planned for the near future. Please see that section for a more indepth discussion of issues related to this Challenge. These are the only material weaknesses remaining for the 

agency to address in any area. 

As the Inspector General’s memorandum notes, “FMC senior management continues to give information security a 

top priority and have corrected many deficiencies....” The FMC is pleased that the FMC’s firewall, Exchange 

server, SERVCON application server and Web server, which were tested during the fiscal year by an outside 

contractor, were found to be well maintained and secured. The FMC is committed to mitigating its remaining 

material weaknesses early in FY 2006, and to a proactive approach to examining and addressing information 

technology issues in the future, especially with regard to security. 

Challenge 2 – Financial Management 

The Inspector General’s memorandum disclosed that there are no material weaknesses that affect the FMC’s 

financial standing. The FMC has worked diligently to ensure that this is the case, and will do so in the future. 

Challenge 3 – Contract Management 

The Inspector General memorandum focuses on the audit of one particular contract: the SERVCON contract. 

Virtually all corrective actions have been taken to address the issues raised by the Inspector General in that audit, 

with all oversight, control and contract management issues being resolved. The FMC has terminated the contract to 

operate the system off-site, transferred management of SERVCON to FMC in-house staff, and a re-write of the 

system’s security and password features has been completed. Disaster recovery testing is expected to be 

accomplished early in FY 2006, at which time corrective action under this audit will be completed. 
 73 

 Management’s Discussion and Analysis FY 2005 

Appendix C 

 Management Decisions and Final Actions on OIG Audit Recommendations 

Management Decisions and Final Actions on OIG Audit Recommendations 

The FMC has established and strives to maintain a good record in resolving and implementing audit 

recommendations presented in OIG reports. Section 5(b) of the Inspector General Act of 1978, as amended, 

requires agencies to report on final actions taken on OIG audit recommendations. 

The following tables give the dollar value of questioned or unsupported costs and of reports of recommendations 

that funds be put to better use as determined through audits conducted by the OIG. 

Number of Dollar Value

Reports (in Thousands)

For Which No Management Decision Had Been Made By the 

Commencement of the Reporting Period. 0 $0.00

For Which a Management Decision was Made During the Reporting 

Period. 0 $0.00

For Which Final Actions Were Taken During the Reporting Period. 0 $0.00

For Which Final Actions Were Not Taken By the End of the Reporting 

Period. 0 $0.00

Totals: 0 $0.00

Management Report on

Audit Reports Which Included

Questioned or Unsupported Costs

Opening Balance of Audits

Number of Dollar Value

Reports (in Thousands)

For Which No Management Decision Had Been Made By the 

Commencement of the Reporting Period. 0 $0.00

For Which a Management Decision was Made During the Reporting 

Period. 0 $0.00

For Which Final Actions Were Taken During the Reporting Period. 0 $0.00

For Which Final Actions Were Not Taken By the End of the Reporting 

Period. 0 $0.00

Totals: 0 $0.00

Management Report on

Audit Reports Which Included

Funds Put to Better Use

Opening Balance of Audits
 FY 2005 FEDERAL MARITIME COMMISSION 

 74 

Appendix C 

 Management Decisions and Final Actions on OIG Audit Recommendations 

Management Decisions Not Implemented Within One Year 

Management decisions were made before September 2004 for the OIG audit reports discussed in the following 

paragraphs. As of September 30, 2005, the Commission did not take final action on some issues. However, 

management has made great strides in resolving each of these matters, and expects to complete corrective action 

early in FY 2006. 

Review of the FMC Implementation of the FISMA Act of 2002 (Audit No. A03-06) - September 16, 2003 

A contractor-conducted audit of the Commission’s automated information security program resulted in numerous 

recommendations for improvements in network and physical security infrastructures, documentation and 

procedures. Additionally, material weaknesses were identified in the information technology program related to 

security. The Commission has resolved virtually all of the issues raised in the audit, including several of the 

material weaknesses. What remains are matters related to the testing of disaster recovery plans as related to the 

agency’s IT systems and the re-write of one application which resides on the agency’s network. During FY 2005, 

the Commission made final arrangements for the use of a remote, alternate site for recovery of its IT systems, and 

plans were in process for developing a re-write of the application. The application re-write is expected to be 

completed early in FY 2006. Subsequent to the re-write, testing will be conducted early in FY 2006 to ensure 

agency plans for disaster recovery are viable. Once that testing is completed, the two material weaknesses will be 

mitigated. 

Audit of Simplified Acquisitions (Audit No. 04-01) - March 2, 2004 

The Inspector General’s audit disclosed that the Commission has effectively implemented the Federal Acquisition 

Streamlining Act of 1994. However, several recommendations were made to further refine Commission business 

processes. There are two outstanding corrective actions yet to be accomplished regarding the development of 

standard operating procedures for the funds obligation process and independent confirmation of goods and 

services. The agency offices involved in procurement and financial management are engaged in a process to update 

all standard operating procedures, and the outstanding corrective actions are expected to be completed early in FY 

2006. 
 75 

 Management’s Discussion and Analysis FY 2005 

Appendix D 

 FMC Organization Chart as of September 30, 2005 

Office of Equal

Employment

Opportunity

Office of the

Inspector General

Office of the

Secretary

Office of

Operations

Office of

Administration

Office of the

General Counsel

Commissioner

(DYE)

Commissioner

(BRENNAN)

Chairman

(BLUST)

Commissioner

(CREEL)

Commissioner

(ANDERSON)

Bureau of

Certification

 and Licensing

Bureau of

Enforcement

Bureau of Trade

Analysis

Office of

Administrative

Law Judges

Office of

Consumer Affairs

and Dispute

Resolution

Services

Area

Representatives

New York

Los Angeles

New Orleans

Seattle

South Florida

Office of Budget

and Financial

Management

Office of Human

Resources

Office of

Information

Technology

Office of

Management

Services
 FY 2005 FEDERAL MARITIME COMMISSION 

 76 

Appendix E 

 Annual Performance Plan (Revised) 2005 

Introduction 

This document comprises the FMC’s Revised Final Annual Performance Plan for FY 2005. The Commission 

has made specific changes to its Final Plan based on a recent agency realignment, and an overall assessment of 

its planning process. This Revised Plan remains closely linked to the agency’s Strategic Plan, and it sets forth 

objective performance goals and narrow, measurable performance indicators so as to facilitate implementation 

and performance assessment. 

In August 2004, the FMC reallocated its resources so as to maximize staff effectiveness and enhance agency 

efforts to better serve the ocean transportation industry. Our aim is to provide an effective regulatory structure, 

serve our stakeholders more efficiently and responsively, and improve our internal business processes and 

operations. We have included specific performance goals in line with this restructuring, as more fully explained 

below. 

This Revised Final Plan reflects a modified approach to our annual planning. We have determined that both 

effectiveness and efficiency can be improved if we operate pursuant to broader performance goals tied to the 

achievement of agency-wide objectives, as opposed to more narrowly focused goals tailored to the 

responsibilities of individual units. Accordingly, agency performance goals now are linked directly to our 

Strategic Goals instead of our Budget Program Activities. This will enable the Commission to pursue its 

strategic objectives in a more cohesive manner, with various agency components working toward common ends. 

It also will facilitate our aim of utilizing a more inclusive, collaborative approach in conducting ongoing 

activities, which we believe both enhances decision-making and improves ultimate results. Further, we 

anticipate that addressing our performance goals in this fashion will foster our efforts to link planning, budgeting 

and performance more effectively. 

 

Additionally, with this Revised Final Plan, we now will allocate all agency resources for the fiscal year. OMB 

guidance requires agencies to reflect in their annual performance plans the resources needed to accomplish stated 

performance goals. Previously, the Commission’s Plans have identified the FTEs and funding required to 

accomplish its stated performance goals, acknowledging that the remainder of its resources were dedicated to its 

various other day-to-day responsibilities. We now will set forth all of our myriad steady state functions, which 

enables our Plan to account for all Commission resources. We have presented performance goals and steady 

state functions for each Strategic Goal; the figures for these five Strategic Goals, when summed, reflect the full 

FTE and funding levels of the President’s FY 2005 budget submission for the Commission. 

For FY 2005, the Commission has placed a major emphasis on furthering its interactions with external parties to 

increase the value of its services and oversight operations. As an example, we plan to establish appropriate 

contacts with consumer protection agencies at the state and local levels to inform them how we can assist in 

redressing transportation-related complaints. We also intend to strengthen relationships with government 

agencies responsible for maritime security to facilitate our mutual efforts to identify and address potential 

security threats. And we propose to improve our communication with the media, industry representatives, and 

other stakeholders to increase public awareness of Commission programs and policies, and to help address 

concerns before they become problems. 

Our FY 2005 Plan also broadens our efforts to implement the President’s Management Agenda initiative to 

expand electronic government. Several performance goals were formulated to improve the management of 

information by utilizing technology to streamline and simplify the delivery of services and information to 

regulated entities, other government agencies and the public, and to create more sophisticated databases which 

will allow staff to more effectively identify and target regulated activities, complaints, and potential abuses. 

The Commission’s Annual Performance Plan comports with the overall objectives of GPRA while maintaining 

flexibility in its presentation and application. The majority of Commission activities are statute-driven, and our 

goals essentially are based upon legislative mandates which are clear and direct. Significant alteration of our 

existing programs is not possible, given that many measures and goals are required by statute. 

 
 77 

 Management’s Discussion and Analysis FY 2005 

Accordingly, OMB agreed that the Commission should use an appropriately scaled mechanism for GPRA process 

and development with a framework which would be productive, yet less resource-intensive. Nonetheless, our Plan 

presents relevant information clearly and concisely, and strives to be as detailed as necessary while avoiding 

minutiae. 

Our Plan sets forth the mission statement and general goals from our Strategic Plan, as a point of reference for the 

reader. As aforementioned, we have set forth agency performance goals and steady state functions under each of 

our Strategic Goals. Each performance goal has been stated as a narrow, measurable objective. For each 

performance goal, we have identified the related “means to achieve” from the Strategic Plan, the intended 

outcomes, appropriate performance indicators, the processes and resources required to accomplish it, and the 

means for measuring/evaluating performance. To ensure a clear understanding of the Plan’s contents, set forth 

below are definitions of basic terms used. We relied on OMB’s published guidance for these definitions, and have 

included parenthetically our interpretation of their practical application. 

Related Strategic Goals/Outcomes/Means - A specific action identified in the agency’s Strategic Plan as one means 

of achieving a particular Strategic Goal (actions to accomplish Strategic Goals). 

Performance Goal - A target level of performance; a measurable objective (a specific, proposed performance 

action). 

Outcome - Intended result or consequence of carrying out the activity (the projected effect or what is hoped to be 

achieved). 

Performance Indicator - A value or characteristic for measuring results (the quantifier or qualifier of performance). 

Processes/Activities - The processes, skills, or resources that are required to effectively accomplish a performance 

goal (what is needed to achieve the goal). 

Performance Measure/Evaluation - The means used to verify and validate measured values (methods used for 

assessing if programs achieved objectives, or, the specific means to measure if outcomes were realized). 

The Commission used its existing consultation process in developing this Plan. We have kept key Congressional 

Committees apprised of our efforts, and have responded to any inquiries. We continued our ad hoc meetings and 

visits with all sectors of the industry to discuss the state of U.S. ocean shipping and the FMC’s oversight 

responsibilities. Rulemakings and formal inquiries also were effective in soliciting industry views on particular 

issues. And, the Commission continued its regular seminars conducted by agency staff at various locations around 

the country, which provide a valuable forum for the exchange of information with the industry and the shipping 

public. We expanded on this concept late in FY 2004 by holding the first of what will be periodic briefings by 

industry experts designed to provide Commission staff with valuable information on industry services, operations, 

business practices, and regulatory concerns. The opinions and comments we received via these various efforts 

have assisted us in developing our performance goals and implementing approaches. 

The Commission will post this Performance Plan on its Internet website to ensure that it is readily accessible to 

interested parties, and will advise all employees to take the time to review it. Additionally, all employee 

performance plans are required to comport with the agency’s Strategic and Annual Performance Plans, and 

contain specific elements and standards with a clear explanation of what is expected of the employee in support of 

the agency achieving its goals. This process in turn has the effect of directly furthering the Administration’s 

initiative on strategic human capital management. Performance of managers and staff is evaluated in part on how 

they achieve the objectives in this Plan. 

Appendix E 

 Annual Performance Plan (Revised) 2005 

INTRODUCTION (continued) 
 FY 2005 FEDERAL MARITIME COMMISSION 

 78 

Appendix E 

 Annual Performance Plan (Revised) 2005 

FMC Mission 

To achieve its vision, the FMC’s mission is: 

Advance the Nation’s interests by fostering an efficient, competitive, secure, market-driven, 

and nondiscriminatory ocean transportation system that is free of unfair foreign maritime 

trade practices and market-distorting activities. 

OSRA and the events of September 11, 2001, have significantly changed the manner in which the business of 

ocean shipping is being conducted. The industry continues to restructure its operations to adapt to dynamic 

economic conditions, emerging trends, and maritime security efforts. International trade remains dependent 

upon an efficient ocean transportation system. Therefore, it is imperative for the FMC to ensure that its 

oversight activities produce a competitive trading environment in U.S. ocean commerce that is in harmony with 

and responsive to international shipping practices, and permits fair and open commerce. We must focus our 

energies and efforts on this mission, and assure that the agency is organized and managed in a manner best 

suited to accomplish it with a minimum of government intervention and regulatory cost. Effective use of 

emerging information technologies will facilitate our efforts. Our actions also must encourage the development 

of a sound U.S.-flag liner fleet. Accordingly, the FMC has established the following five strategic goals to carry 

out its statutory mandates. 

1. Efficient Regulatory Process: Provide a timely, efficient and decisive regulatory process, including 

alternative dispute resolution, to enable all segments of the industry to operate more effectively, with a 

minimum of regulatory costs. 

2. Compliance: Promote efficiency and fairness in U.S. foreign waterborne commerce through various means, 

including outreach and monitoring to protect the public and assist stakeholders in achieving compliance 

with ocean transportation statutes administered by the FMC. 

3. Balanced Enforcement: Foster economic efficiencies, reliance on marketplace factors and maritime security 

by administering U.S. shipping statutes in a balanced and equitable manner to redress excessive 

anticompetitive actions and other unlawful activities. 

4. Technological Efficiencies: Employ technological enhancements to improve efficiency and to facilitate the 

exchange of information. 

5. Management Capabilities: Ensure the FMC has the appropriate organizational framework and management 

systems to carry out its statutory mandates. 

 
 79 

 Management’s Discussion and Analysis FY 2005 

Appendix E 

 Annual Performance Plan (Revised) 2005 

Linkage Between Mission Statement and Strategic Goals 

Our strategic goals address essential FMC statutory, programmatic, and management responsibilities. They 

were developed with a specific focus on accomplishing the basic purposes of our mission and attaining the 

competitive, nondiscriminatory shipping environment envisioned by the1984 Act, as amended by OSRA. 

The primary intention of Strategic Goal 1 is to minimize regulatory costs by maintaining timely and decisive 

regulatory processes, and providing various dispute resolution services. This will render the FMC more 

effective in addressing matters that perpetuate discrimination or preclude industry efficiency, while reducing the 

costs of pursuing matters before the Commission. Decisive action and effective assistance in resolving informal 

complaints or disputes will help to remove uncertainties as to statutory interpretations or the application of FMC 

rules. Such uncertainties may impede operational efficiencies or technological changes, each of which can foster 

a more economical ocean shipping system. 

Our second strategic goal centers on achieving compliance with the substantive provisions of the shipping 

statutes the FMC administers, and protecting those involved in U.S. ocean commerce from unfair practices. We 

will address this goal particularly by interacting with all sectors of the industry, and by vigilant monitoring of 

ongoing commercial activities. Accomplishing this goal should minimize the unjust discrimination and undue 

preference or prejudice that precludes certain shipping interests from obtaining rates or service levels that can 

render their businesses more economic and efficient. Increasing industry compliance should enable stakeholders 

to concentrate on fair and legal means of enhancing operational efficiency, secure in the knowledge that 

competitors are not engaging in widespread illegal actions aimed at improving short-term profits. The agency’s 

focus on the qualifications of intermediaries operating in the U.S. trades will afford greater protection to our 

stakeholders and contribute to national maritime security. And cruise passengers also will be protected through 

the demonstration of financial responsibility by passenger vessel operators. 

Strategic Goal 3 is designed to foster economic efficiencies, assist maritime security initiatives, promote reliance 

on marketplace factors, and redress excessive anticompetitive practices harmful to international commerce. This 

is a direct link to our mission statement’s call for an efficient, secure, competitive, market-driven ocean 

transportation system. Our continuing efforts to address the actions of foreign governments that adversely affect 

U.S. interests and our foreign trade comport with that aspect of our mission aimed at creating an environment 

“free of unfair foreign maritime trade practices.” Our focus on commercial malpractices enhances our objective 

of limiting unlawful activities. 

We also have a specific strategic goal that focuses on making effective use of advancements in IT to improve the 

efficiency of our operations and enhance our exchange of information with external parties. Carrying out the 

agency’s mission in times of budgetary limitations dictates that we appropriately utilize all available resources. 

Dynamic changes continue to be made in this area, and the Commission intends to take advantage of any 

improvement that can enable it to perform its functions more effectively. We hope to improve our business 

operations so as to add efficiency to the Commission’s dissemination and receipt of information. We intend to 

perform the research and analysis necessary to identify the best options for implementing technical 

enhancements to facilitate our efforts to achieve our mission. 

Finally, our fifth strategic goal addresses Commission management and operations. In order to achieve the 

objectives of our mission, we must maintain effective processes that enhance efficiency, without serving as ends 

in themselves. It is essential that we manage for results, and that we effectively tie our budget needs to our 

performance. This strategic goal serves as the internal underpinning that enables us to accomplish the policy 

objectives set forth in our mission statement. This goal also ensures continuation of a comprehensive approach 

to the strategic management of our human capital. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 80 

Appendix E 

 Annual Performance Plan (Revised) 2005 

Linkage Between Mission Statement and Strategic Goals (continued) 

Achieving these mission-driven goals will enable us to address the external factors we face, while assuring an 

equitable and efficient administration of the shipping statutes under our jurisdiction. Our processes and 

procedures will be refined or updated as necessary. We are committed to accomplishing our strategic goals and 

the outcome goals related to them. Therefore, specific means have been identified to enable the FMC to achieve 

these goals in the most cost-efficient and least disruptive manner possible. 

STRATEGIC GOAL: Efficient Regulatory Process 

 37 FTEs and $5,743,000 will be required to accomplish this goal. 

2005 Steady State Activities: 

• Adjudication and resolution of complaints. 

• Adjudication and resolution of investigatory proceedings, including fact-findings and show cause 

proceedings. 

• Issuance of rules through the rulemaking process. 

• Commission decision-making activities through meetings (formal and notation) that comply with 

the Government in the Sunshine Act. 

• Public information and assistance processes such as press relations, responses to legislative and 

regulatory inquiries, and compliance with Freedom of Information Act and Privacy Act 

requirements. 

• Other regulatory processes, including activities such as appeals of delegated authority actions, 

policy issuances, and formal petition processes. 

• Providing timely legal counsel to the Commission in order to facilitate regulatory action that is 

consistent with statutory mandates, representing the Commission’s interest in matters before 

Congress and OMB. 

• Reviewing and refining Commission rules to determine their economic impact and ensure that they 

reflect the current industry environment, as well as meet the needs of the Commission’s regulatory 

mandate. 

• Compiling, organizing, and maintaining Commission records. 

• Monitor, review and modify, as necessary, Commission regulations to address changing trade 

conditions, industry practices or statutory modifications. 
 81 

 Management’s Discussion and Analysis FY 2005 

Appendix E 

 Annual Performance Plan (Revised) 2005 

Performance 

Goal

Related 

Strategic 

Goals/

Outcomes

/Means

 

Outcome Performance 

Indicator

Process/Activity Performance 

Measure/

Evaluation

1.Promote 

the use of 

ADR to 

potential 

users & 

provide 

conflict 

resolution 

training to 

Commission 

managers. 

Refine 

ADR 

Process. 

Increased 

awareness & 

utilization of 

ADR by the 

industry, & 

Commission 

managerial 

officials better 

prepared to deal 

with human 

resource 

conflicts. 

Increased use of 

ADR to resolve 

industry disputes, 

& improved 

Commission 

productivity. 

Presentations & 

training sessions 

provided by the 

ADR function, 

whether by 

Commission 

officials or outside 

presenters/trainers. 

-Number & 

variety of 

presentations & 

training sessions 

provided. 

-Feedback from 

participants. 

2.Develop 

options for 

updating & 

modernizing 

the 

Commission’

s Rules of 

Practice & 

Procedure, 

including 

exploring the 

ability to 

utilize 

technology 

for electronic 

filing. 

Review 

Procedural 

Rules. 

-Definitive 

analysis of effect 

of prospective 

changes on the 

regulatory 

process, & 

whether 

Commission 

action is 

warranted. Such 

actions could 

include NOI or 

NPRM to solicit 

public comment. 

-Plan of action to 

eliminate barriers 

to greater 

utilization of 

electronic 

business 

processes. 

Report to 

Commission with 

analysis of options 

& 

recommendations 

on what changes 

are warranted. 

-Meetings are 

scheduled to 

present ideas, 

gather information 

& study options. 

-Report to be filed 

with Commission 

with findings. 

-Task force cochaired by GC & 

Secretary, with 

legal input from 

ALJ & technical 

input from CIO, & 

participation by 

program bureaus. 

-If public 

comment is 

solicited, assess 

comments 

received from 

industry & public. 

-Final 

Commission 

determination of 

staff 

recommendation. 

-Assess impact of 

any proposals 

finalized. 

STRATEGIC GOAL: Efficient Regulatory Process (continued) 
 FY 2005 FEDERAL MARITIME COMMISSION 

 82 

Appendix E 

 Annual Performance Plan (Revised) 2005 

3.Develop 

automated 

FMC-18 to 

permit 

electronic 

filing & 

explore 

feasibility of 

electronic 

payment & esignature 

capability. 

 

Encourage 

use of 

electronic 

filing. 

-Permit public the 

option to file 

Form FMC-18 

electronically 

rather than typing 

& mailing form 

into the FMC. 

-Reduce FMC 

administrative 

processing time 

of application. 

-Easy 

accessibility to all 

information on 

Form FMC-18 for 

staff. 

-Applicants can 

track progress of 

their applications 

online. 

-Applicants have 

various options of 

payment. 

-Applicants can 

sign application 

electronically. 

-Volume of 

applications filed 

electronically. 

-Feedback from 

filers & FMC 

staff. 

-Allocation of 

FMC resources. 

-Design input 

screens & 

directions to 

facilitate 

application 

process. Include 

various userfriendly features 

such as track 

progress of 

application, 

facilitate filing 

amendments to 

current application 

or provision of 

supplemental 

information & 

documentation, & 

24 X 7 access to 

filing system. 

-Develop standard 

procedures & 

systems to 

streamline & 

reduce processing 

time of 

applications. 

-Perform internal 

audit to ensure 

data quality 

(accuracy, 

completeness, 

etc.) & security of 

system. 

-Number of 

applications filed 

electronically. 

-Reduction of 

administrative 

processing time of 

applications. 

-Feedback from 

industry. 

STRATEGIC GOAL: Efficient Regulatory Process (continued) 
 83 

 Management’s Discussion and Analysis FY 2005 

Appendix E 

 Annual Performance Plan (Revised) 2005 

STRATEGIC GOAL: Compliance 

36 FTEs and $5,403,000 will be required to accomplish this goal. 

2005 Steady State Activities: 

• Reviewing and maintaining a database of SCs between ocean common carriers and shippers, and using this 

database to guard against anticompetitive practices and other unfair prohibited activities under the 1984 Act. 

• Ensuring that common carriers’ rates and charges are accessible to the shipping public in private, 

electronically accessible systems. 

• Ensuring that OTIs maintain bonds that protect the shipping public from financial losses. 

• Providing formal and informal legal opinions and guidance to the Commission’s staff and the general public 

to ensure clarity and understanding of Commission rules and regulations. 

• Administering the Commission’s international affairs program. 

• Liaisoning with other agencies regarding maritime security. 

• Reviewing operational and pricing agreements among ocean common carriers and marine terminals to 

ensure that they do not unduly restrict competition. 

• Issuing passenger vessel certificates evidencing financial responsibility of vessel owners or charterers to pay 

judgments for personal injury or death or to repay fares for the nonperformance of voyage or cruise. 

• Licensing OTIs to protect the public from unqualified, insolvent, or dishonest companies. 

• Responding to informal complaints and informal inquiries from Congress and the public relating to 

Commission responsibilities. 

• Acting as a liaison between the FMC and the public by responding and/or coordinating agency responses to 

public inquiries. 

• Maintaining a specialized maritime law library for agency and public use. 

• Conduct audit activity of regulated entities, including OTIs and VOCCs, to promote and ensure compliance 

with applicable statutes and Commission regulations. 

• Respond to inquiries and complaints from the regulated industry and shipping public. Provide information, 

assistance and forms necessary to comply with applicable statutes and Commission regulations, including 

educational seminars. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 84 

Appendix E 

 Annual Performance Plan (Revised) 2005 

STRATEGIC GOAL: Compliance (continued) 

Performance 

Goal

Related 

Strategic 

Goals/

Outcomes/

Means

 

Outcome

Performance 

Indicator

Process/Activity Performance 

Measure/

Evaluation

 

1.Develop public 

relations 

strategies & 

programs. 

Foster 

dialogue w/

industry. 

-Improve/

establish 

relationships/

image w/media, 

industry & 

government 

instrumentalitie

s. 

-Establish lines 

of 

communication 

w/constituents 

& others to 

address 

concerns before 

they become 

problems. 

-Increased 

public 

awareness of 

Commission 

policies & 

programs. 

-Increased media 

contacts and/or 

more stories/

articles re FMC 

activities in 

media outlets, 

particularly nonindustry media. 

-Increased FMC 

representation at 

public meetings, 

particularly of the 

nontraditional 

variety, i.e., 

shippers, travel 

agents, etc. 

-More frequent 

contact/

interaction w/

individuals from 

the public, media 

& industry. 

-Meetings w/

media, industry 

& government 

representatives. 

-Attendance at 

conferences & 

meetings, both 

social & 

business. 

-Develop a plan 

for producing 

brochures & 

other educational 

publications. 

-ADR 

-Explore 

webcasting for 

Commission 

meetings. 

-Wider 

distribution of 

FMC 

publications. 

-More contacts 

w/media, 

industry & other 

government 

representatives. 

2.Enhance 

industry outreach. 

Increase 

outreach to 

industry. 

-Increased level 

of 

communication 

between agency 

& industry 

stakeholders. 

-Positive & 

effective 

relationships 

between agency 

representatives 

& industry 

representatives. 

-Greater 

industry 

awareness of 

benefits of 

FMC oversight. 

-Number of 

outreach 

activities and 

FMC-sponsored 

seminars, and 

types of 

conferences 

attended. 

-Greater FMC 

voice in industry 

press. 

-Improved staffwide conference 

attendance. 

-Continue FMCsponsored 

seminars. 

-Increased 

proactive press 

contact regarding 

FMC activities & 

oversight 

initiatives. 

-Number of 

seminars held & 

feedback on 

quality of 

participation. 

-Improved 

Commission 

representation at 

select seminars/

conferences 

relevant to 

agency oversight 

responsibilities. 

-Quantity & 

quality of 

positive press 

coverage. 
 85 

 Management’s Discussion and Analysis FY 2005 

Appendix E 

 Annual Performance Plan (Revised) 2005 

STRATEGIC GOAL: Compliance (continued) 

Performance 

Goal

Related 

Strategic 

Goals/

Outcomes/

Means

 

Outcome

Performance 

Indicator

Process/Activity Performance 

Measure/

Evaluation

 

3.Provide 

opportunity for 

VOCCs to 

establish a “best 

practices” 

program to limit 

participation of 

unlawful entities 

in ocean 

transportation. 

Increase 

outreach to 

industry. 

-Promote 

equitable 

competition 

among entities 

acting as OTI 

service 

providers. 

-Promote 

voluntary 

compliance by 

vessel operators 

w/regard to 

statutory 

requirements to 

provide 

transportation 

services & 

service 

contracts to 

lawful OTI 

entities. 

-Improve 

maritime 

security by 

curtailing 

unlawful 

participation in 

the ocean 

transportation 

system. 

-VOCCs advised 

of opportunity to 

adopt “best 

practices” 

program. 

-Reduction in 

number of 

unlawful OTIs 

receiving ocean 

transportation 

services. 

-Use educational 

programs & 

public notice to 

advise VOCCs of 

“best practices” 

opportunity. 

-Give appropriate 

“mitigation” 

recognition to 

entities with 

“best practices” 

programs in 

enforcement 

actions. 

-Review of 

outreach & 

educational 

efforts & 

materials 

developed to 

advise industry 

of “best 

practices” 

opportunity. 

-Number of 

entities adopting 

“best practices” 

programs for 

voluntary 

compliance 

efforts. 

-Usage of “best 

practices” in 

mitigation of 

enforcement 

actions. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 86 

Appendix E 

 Annual Performance Plan (Revised) 2005 

STRATEGIC GOAL: Balanced Enforcement 

16 FTEs and $2,313,000 will be required to accomplish this goal. 

2005 Steady State Activities: 

• Investigating discriminatory rates, charges, classifications, and practices of common carriers, terminal 

operators, and OTIs operating in the foreign commerce of the U.S. 

• Representing the FMC before U.S. courts and other administrative agencies. 

• Reviewing staff recommendations and initial decisions for legal sufficiency and preparing final decisions and 

orders. 

• Regulating rates, charges, and rules of government-owned or -controlled carriers to ensure that they are just 

and reasonable and are not unfairly undercutting private competitors. 

• Protecting shippers and carriers engaged in the foreign commerce of the U.S. from restrictive or unfair foreign 

laws, regulations or business practices that harm U.S. shipping interests or ocean trade. 

• Prosecute formal proceedings initiated by the Commission. 

• Monitor activities and conduct investigations of regulated entities and of SC activity to ensure compliance 

with statutes and regulations administered by the Commission. 

• Conduct non-adjudicatory fact-finding proceedings as directed by the Commission. 

• Provide liaison between the Commission and the shipping industry, the public and other governmental entities. 

• Coordinate and cooperate with other government entities to improve homeland security by effective exchange 

of information and assistance regarding foreign ocean transportation. 
 87 

 Management’s Discussion and Analysis FY 2005 

Appendix E 

 Annual Performance Plan (Revised) 2005 

STRATEGIC GOAL: Balanced Enforcement (continued) 

Performance 

Goal

Related 

Strategic 

Goals/

Outcomes/

Means

 

Outcome

Performance 

Indicator

Process/Activity Performance 

Measure/

Evaluation

1.Contact & 

educate consumer 

protection 

agencies on the 

state & local 

government level 

regarding 

Commission 

programs & 

remedies to 

protect & assist 

the public from 

the unlawful 

activities of 

transportation 

providers & 

intermediaries. 

Increase 

dealings 

with 

industry & 

government

. 

-Commission 

can provide 

assistance to 

consumer 

protection 

agencies in 

redressing 

transportation 

complaints. 

-Agencies can 

direct the 

Commission to 

entities 

unlawfully 

providing 

transportation 

services. 

Number of 

agencies 

contacted & 

identification of 

information 

provided & 

educational 

programs 

conducted. 

-Secretary & 

Dir., Operations, 

coordinate & 

conduct outreach, 

& educational 

efforts reach 

agencies & 

entities most 

likely to address 

ocean 

transportation 

concerns. 

-Disseminate 

materials 

discussing FMC 

& its functions 

for distribution 

by other agencies 

& entities. 

-Appear at 

seminars & 

meetings to 

discuss FMC & 

its functions. 

-Number of 

agencies 

contacted & 

educational 

programs 

conducted. 

-Feedback from 

consumer 

agencies & the 

public with 

regard to 

Commission 

efforts. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 88 

Appendix E 

 Annual Performance Plan (Revised) 2005 

2.By 6/30/05, 

redesign internal 

agreement 

database to 

enable more 

efficient 

oversight of 

agreement 

activities. 

Monitor 

competitive 

trade 

conditions. 

-Identification 

of agreements 

that have the 

potential for 

unreasonable 

market 

distortions. 

-Shifting of 

resources from 

those 

agreements that 

have little or no 

competitive 

impact to focus 

on those which 

possibly could 

distort the 

market. 

-More in-depth 

analyses of 

potentially 

problematic 

agreements 

resulting in a 

greater 

incidence of 

Commission 

agreement 

initiatives to 

address 

possible abuses. 

-Fewer 

instances of 

marketdistorting 

activities 

adversely 

affecting the 

shipping public. 

-Quicker 

agency 

response to 

potential 

problems. 

-Ability to 

identify readily 

agreements for 

specific 

monitoring. 

-Number of 

shipper 

complaints. 

-Number of 

Commission 

agreement 

initiatives. 

-Number of 

requests for 

specific database 

reports from 

agency 

components. 

-Number of 

agency inquiries 

to agreement 

parties regarding 

their activities. 

-Review current 

agreement 

elements to 

determine which 

are outdated & 

what new ones 

should be added. 

-Confer w/other 

agency 

components for 

their input on 

what current 

elements are still 

useful & what 

additional 

elements would 

better support 

their program 

goals & 

objectives. 

-Review effective 

agreements to 

ensure accurate 

coding of 

agreement 

authorities into 

the database. 

-Design database 

reports to meet 

the needs of 

various agency 

components. 

 

-Fewer shipper 

complaints 

regarding 

agreement 

activities. 

-Feedback from 

users of the 

database reports 

on the 

effectiveness & 

efficacy of such 

information in 

support of their 

program goals & 

objectives. 

-Instances of 

agency 

interventions to 

address potential 

abuses. 

 

STRATEGIC GOAL: Balanced Enforcement (continued) 
 89 

 Management’s Discussion and Analysis FY 2005 

Appendix E 

 Annual Performance Plan (Revised) 2005 

STRATEGIC GOAL: Balanced Enforcement (continued) 

3.Review results 

of major 

enforcement 

actions (e.g., 

those targeted at 

anti-competitive 

practices of ports 

& ocean common 

carriers) during 

the past 3 years to 

assess 

effectiveness of 

remedies. 

Monitor 

competitive 

trade 

conditions. 

 

 

 

 

 

-Assure 

practices of 

carriers or ports 

are not 

unlawfully anticompetitive. 

-Assure 

Commission 

vigilance in 

monitoring use 

of antitrust 

immunity. 

 

-Remedies of 

past enforcement 

& compliance 

efforts have been 

properly 

implemented. 

-How effectively 

compliance 

directives have 

been 

implemented. 

 

-In coordination 

with BTA & 

BCL, review 

reports, minutes 

& activities of 

entities 

previously 

subject to 

enforcement 

actions. 

-Director, BOE 

ensures 

appropriate 

parameters for 

review & 

assessment are in 

place. 

Remedial actions 

taken and 

currently 

effective in 

addressing 

anticompetitive 

activities. 

 
 FY 2005 FEDERAL MARITIME COMMISSION 

 90 

Appendix E 

 Annual Performance Plan (Revised) 2005 

4.Develop 

additional 

relationships w/

other agencies w/

responsibilities 

related to 

maritime 

security, 

including DHS, 

DOT & 

intelligence 

agencies. 

Cooperate 

w/

government 

agencies 

for marine 

security. 

-Increased 

interagency 

communication

s & 

informationsharing 

regarding 

national 

security as it 

applies to the 

maritime 

industry. 

-Positive 

relations among 

relevant 

agencies & 

enhanced 

understanding 

of the FMC’s 

role in maritime 

security issues. 

-Continued 

FMC 

contribution to 

interagency 

efforts to 

identify 

potential 

security threats. 

-Coordinated 

efficient 

approach to 

maritime 

security 

challenges. 

-FMC continues 

to be represented 

at interagency 

meetings of the 

Container 

Working Group 

& other relevant 

interagency 

groups or task 

forces. 

-FMC views & 

participation are 

reflected in 

appropriate 

reports & 

communications 

memorializing 

meetings or 

consultations 

concerning 

maritime 

security. 

-Cohesive 

relationships 

continue to be 

formed. 

-Concerted 

informationsharing & 

coordination of 

agency activities 

have been 

accomplished. 

-Chairman 

provides policy 

direction to 

OGC. 

-OGC continues 

to serve as liaison 

& coordinates 

with Commission 

bureaus. 

-Regular 

meetings w/

relevant agencies 

are attended or 

initiated by FMC 

liaison. 

-

Communications 

are submitted to 

agencies to 

memorialize 

meetings & 

conversations or 

to report recent 

developments in 

maritime security 

issues. 

-Feedback on 

Commission 

representatives’ 

participation in 

activities & 

meetings. 

-Number of 

meetings, 

contacts & 

interagency 

activities. 

STRATEGIC GOAL: Balanced Enforcement (continued) 
 91 

 Management’s Discussion and Analysis FY 2005 

Appendix E 

 Annual Performance Plan (Revised) 2005 

STRATEGIC GOAL: Technological Efficiencies: 

18 FTEs and $2,374,000 will be required to accomplish this goal. 

2005 Steady State Activities: 

• Implementing a wide range of IT programs and services, including operating the agency’s local area 

network, strategic planning for short- and long-term IT initiatives, IT security, data telecommunications, 

database development and management, and Internet page development and maintenance to enhance 

productivity and efficiency. 

• Maintaining and updating internal databases to enhance the ability of the public and Commission to obtain 

relevant program-related information and enhance staff productivity. 

• Converting Commission records into electronic format to enable easier public access to information. 

Performance 

Goal

Related 

Strategic 

Goals/

Outcomes/

Means

 

Outcome

Performance 

Indicator

Process/Activity Performance 

Measure/

Evaluation

 

1.Enhance the 

reliability & 

efficiency of 

SERVCON by 

ensuring that 

filers use proper 

electronic 

document file 

names to identify 

each SC 

submission. 

 *In addition, 

other changes to 

flag contract 

documents 

transmitted into 

the SERVCON 

system with 

problems, e.g., 

retroactive 

effective date. 

This performance 

goal is being 

modified to 

accelerate the 

streamlining & 

usefulness of the 

system for 

anticipated short- 

& long-term 

growth. 

Use 

technology 

to improve 

agency 

work 

processes. 

 

 

 

-All new SCs 

filed in 

SERVCON 

have proper 

document file 

names. 

-Eliminate 

targeted SCs 

that are 

unnamed in 

SERVCON & 

unretrievable by 

the FMC’s 

search engine. 

-All targeted SCs 

are retrievable 

through the 

FMC’s electronic 

search engine. 

-No omission of 

critical 

information that 

is obtainable only 

in confidential 

contracts is 

detected. 

-Audit existing 

contracts 

incorrectly 

named. 

-Develop 

approach to 

ensure proper SC 

file name. 

-Determine 

process for 

eliminating 

improperly 

named SCs. 

-Identify targeted 

SCs to be 

corrected. 

-Reports/studies 

based on 

information 

contained in SC 

filings are 

reliable due to 

appropriate 

naming of unique 

electronic 

document files. 

-Problems 

associated w/

improper file 

names, based on 

random searches, 

are eliminated. 
 FY 2005 FEDERAL MARITIME COMMISSION 

 92 

Appendix E 

 Annual Performance Plan (Revised) 2005 

Performance 

Goal

Related 

Strategic 

Goals/

Outcomes/

Means

 

Outcome

Performance 

Indicator

Process/Activity Performance 

Measure/

Evaluation

 

2.Assure that 

95% of the 

security on 

agency systems 

is in 

conformance w/

Administration & 

Congressional 

mandates. 

Follow OMB 

regulations 

to meet 

GPEA/

FISMA 

requirements

. 

-More secure 

IT systems in 

furtherance of 

agency 

mission. 

-Provide users 

with a more 

stable working 

environment to 

allow for more 

efficient 

business 

processes. 

-Enhance safety 

of data. 

-Compliance w/

OMB guidance 

under FISMA 

and GPEA. 

-No IT systems 

reported to have 

unauthorized 

access. 

-No, or minimal, 

viruses reported 

that have impact 

on network 

operation or 

performance. 

-Net IT systems 

will incorporate 

security plans. 

-All systems 

report latest 

security & virus 

detection tool 

installed. 

-IT office will 

work with 

program offices 

to ensure system 

development will 

follow SDLC & 

include required 

plans. 

-IT office applies 

FISMA 

guidelines to IT 

investments. 

-IT office will 

work w/program 

offices to 

provide feedback 

on security 

matters & 

implement 

controls. 

-POA&Ms for 

FISMA report to 

OMB. 

-Forms 

collections 

pursuant to efiling processes. 

-Receive 

minimal 

corrective action 

findings on IG 

independent 

audit. 

STRATEGIC GOAL: Technological Efficiencies: (continued)
 93 

 Management’s Discussion and Analysis FY 2005 

Appendix E 

 Annual Performance Plan (Revised) 2005 

STRATEGIC GOAL: Technological Efficiencies: (continued)

Performance 

Goal

Related 

Strategic 

Goals/

Outcomes/

Means

 

Outcome

Performance 

Indicator

Process/Activity Performance 

Measure/

Evaluation

 

3.Analyze the 

current FMC 

Internet website 

& develop a plan 

to create a more 

efficient & 

comprehensive 

design. 

Automate 

agency 

systems. 

-Information & 

participation 

from all 

bureaus/offices 

will ensure that 

website 

material is 

comprehensive 

& correct. 

-Information 

currently on the 

website will be 

revised & 

edited to be 

more userfriendly & 

reflect OMB’s 

proposed 

website 

guidelines. 

-Any relevant 

information not 

currently on the 

website will be 

compiled & 

formatted for 

addition to the 

website. 

-Issues 

regarding the 

technological 

implementation 

of the design 

will be 

identified. 

 

-Participation of 

all agency 

bureaus/offices 

in designing & 

agreement on 

design. 

-Presentation of 

recommendation 

to Chairman & 

SES. 

-Positive 

feedback from 

Chairman & 

SES. 

 

-Create task 

force w/

representatives 

from bureaus/

offices. 

-Hold periodic 

group & 

individual 

meetings to 

discuss design 

templates & 

compilation of 

information. 

-Create a design 

plan, both visual 

(templates, 

colors, graphics, 

etc.) & 

organizational 

(what 

information, how 

the information 

is presented, 

etc.). 

-Compile new 

information. 

-Comprehensive 

editing of both 

new & old 

information. 

-Hold meetings 

w/OIT to discuss 

technological 

needs. 

-Prepare & give 

presentation to 

Chairman & 

SES. 

-Final 

determination by 

Chairman to 

begin 

implementation 

of website 

redesign. 

-Compliance 

with all OMB 

guidelines & 

proposed 

guidelines. 

 
 FY 2005 FEDERAL MARITIME COMMISSION 

 94 

Appendix E 

 Annual Performance Plan (Revised) 2005 

STRATEGIC GOAL: Management Capabilities: 

26 FTEs and $3,662,000 will be required to accomplish this goal. 

2005 Steady State Activities: 

• Executing financial management policies and programs, including developing annual budget justifications 

for submission to the Congress and OMB, managing agency appropriations, administering internal control 

systems for agency funds, travel and cash management, and coordinating with contractors who provide 

accounting and payroll services. 

• Fostering human resource management principles, including recruitment and placement, position 

classification and pay administration, occupational safety and health, employee assistance, employee 

relations, workforce discipline, performance management and incentive awards, employee benefits, career 

transition, retirement, employee development and training, personnel security, and equal employment 

opportunity. 

• Ensuring the program operations of the agency are administratively supported via telecommunications, 

procurement of administrative goods and services, property management, office space, printing and 

copying, mail and records services, facilities and equipment maintenance, and transportation. 

• Promoting economy and efficiency in the administration of the agency’s programs, and detecting waste, 

fraud and abuse in same via auditing agency operations. 

• Providing guidance to staff regarding administrative matters, including procurement, personnel and 

contracting issues. 

• Ensuring program compliance with various rules and regulations regarding such areas as forms clearance, 

• Paperwork Reduction, Small Business Paperwork Reduction Act, and other Federally required reports and 

submissions. 
 95 

 Management’s Discussion and Analysis FY 2005 

Appendix E 

 Annual Performance Plan (Revised) 2005 

STRATEGIC GOAL: Management Capabilities: (continued) 

Performance 

Goal

Related 

Strategic 

Goals/

Outcomes/

Means

 

Outcome

Performance 

Indicator

Process/Activity Performance 

Measure/

Evaluation

 

1.Implement an 

IT CPIC process 

for the 

Commission’s 

major IT 

investments. 

Train & 

provide IT to 

improve 

workforce 

productivity. 

-Commission’s 

IT expenditure 

decisions make 

the best use of 

scarce agency 

resources. 

-Complying 

with OMB 

guidance under 

ITMRA & 

GPRA. 

-New IT systems 

support multiprogram 

requirements. 

-New IT systems 

will share data 

across the 

Commission & 

externally, as 

required. 

-IG audits 

identify minimal 

corrective 

actions needed to 

improve IT 

program 

management. 

-Commission 

will provide solid 

business cases 

for projects that 

request funds to 

support IT 

investments. 

-Formal IT CPIC 

issued in fourth 

quarter of FY 

2005. 

-Bureau/office 

heads ensure 

staff follows 

policy guidelines 

when developing 

proposals for 

applications. 

-Requests for IT 

project funding 

comport with 

OMB guidelines. 

-IG audits. 

 
 FY 2005 FEDERAL MARITIME COMMISSION 

 96 

Appendix E 

 Annual Performance Plan (Revised) 2005 

Performance 

Goal

Related 

Strategic 

Goals/

Outcomes/

Means

 

Outcome

Performance 

Indicator

Process/Activity Performance 

Measure/

Evaluation

 

2.Complete 

implementation 

of strategic 

linkage of agency 

planning, 

budgeting & 

performance. 

Integrate 

performanc

e review 

with 

budget. 

-Managers have 

more control/

flexibility over 

resources. 

-Managers have 

timely, 

thorough & 

accurate 

information to 

plan activities 

& monitor 

business 

processes. 

-Agency 

ensures that its 

major priorities 

& objectives 

drive the 

allocation of 

resources, & 

that staff is 

managed & 

appraised in 

line with 

accomplishmen

t of clearly 

articulated 

performance 

goals. 

-Improved 

performance, 

better service to 

stake-holders, 

& more costeffective use of 

resources. 

-FY 06 & 07 

budgets & annual 

performance 

plans are 

completed in line 

w/stated goals & 

outcomes. 

-FY 05 resources 

allocated via 

collaborative 

senior 

management 

process that 

appropriately 

funds relevant 

priorities/

functions/ 

objectives. 

-Staff more fully 

engaged in 

agency-wide 

planning/ 

business 

processes. 

-Awards/

incentives based 

on 

accomplishment 

of stated 

performance 

goals. 

-Complete 

implementation 

of a process 

whereby all 

senior managers 

collaborate in the 

identification of 

relevant 

priorities/

functions, 

allocation of all 

resources, & the 

consistent 

assessment of 

staff 

performance. 

-FY 06 budget & 

annual 

performance plan 

are completed via 

refined 

collaborative 

process. 

-Broader use of 

participative 

management to 

include all levels 

of agency staff in 

planning efforts 

& identification 

of most viable 

regulatory 

approaches/ 

actions. 

-Budgets are 

developed based 

on agency-wide 

assessments, as 

opposed to 

singular bureau/

office views. 

-Feedback from 

OMB & 

Congressional 

Committees. 

-Chairman’s 

assessment of 

agency 

operations to 

ensure desired 

linkage occurred. 

-Managers’ 

assessment of 

staff 

performance. 

-Managers’ 

assessment of 

various business 

processes to 

determine 

impacts on 

efficiency/

effectiveness. 

STRATEGIC GOAL: Management Capabilities: (continued) 
 97 

 Management’s Discussion and Analysis FY 2005 

Appendix F 

 GLOSSARY OF ACRONYMS 

-#- 

 1920 Act Merchant Marine Act, 1920

 1984 Act Shipping Act of 1984

-A- 

 ACE/ITDS Automated Commercial Environment/ 

 International Trade Data System

 ADR Alternative Dispute Resolution 

 ALC Agency Location Code 

 ALJ Administrative Law Judge 

-B- 

 BCL Bureau of Certification and Licensing 

 BOE Bureau of Enforcement 

 BPD Bureau of the Public Debt 

 BTA Bureau of Trade Analysis 

-C- 

 CATs Carriers’ Automated Tariff System 

 CADRS Office of Consumer Affairs and Dispute Resolution 

 Services 

 C&A Certification and Accreditation Services 

 CBP U. S. Customs and Border Protection 

 CFR Code of Federal Regulations 

 CIO Chief Information Officer 

 COOP Continuity of Operations Plan 

 CPIC Capital Planning and Investment Control 

 CSRS Civil Service Retirement System 

-D- 

 DHS Department of Homeland Security 

 DOT Department of Transportation 

-F- 

 FACTS Federal Agencies’ Centralized Trial-Balance System 

 FISMA Federal Information Security Management Act 

 FMC/Commission Federal Maritime Commission 

 FMCSA Federal Motor Carrier Safety Association 

 FMFIA Federal Managers’ Financial Integrity Act 

 FOIA Freedom of Information Act 

 FPS Federal Protective Service 

 FSPA Foreign Shipping Practices Act of 1988 

 FTE Full Time Equivalent 

 FY Fiscal Year 
 FY 2005 FEDERAL MARITIME COMMISSION 

 98 

Appendix F 

 GLOSSARY OF ACRONYMS 

-G- 

 GPRA Government Performance and Results Act 

 GRI General Rate Increase 

-I- 

 IG Inspector General 

 IPAC Intergovernmental Payments and Collections 

 IRS Internal Revenue Service 

 IT Information Technology 

 

-M- 

 MD&A Management’s Discussion and Analysis 

 MS Microsoft 

 MTO Marine Terminal Operator 

-N- 

 NFC National Finance Center 

 NIST National Institute of Standards and Technology 

 NSA NVOCC Service Arrangements 

 NVOCC Non-Vessel Operating Common Carrier 

-O- 

 OA Office of Administration 

 OBFM Office of Budget and Financial Management 

 OGC Office of General Counsel 

 OHR Office of Human Resources 

 OIG Office of the Inspector General 

 OIT Office of Information Technology 

 OMB Office of Management and Budget 

 OMS Office of Management Services 

 OPM Office of Personnel Management 

 OPS Office of Operations 

 OPVIP Office of Passenger Vessels and Information Processing 

 OS Office of the Secretary 

 OSRA Ocean Shipping Reform Act of 1988 

 OTI Ocean Transportation Intermediary 

-P- 

 P.L. Public Law 

 PAR Performance and Accountability Report 

 PIERS Port Import Export Reporting Service 

 PMA President’s Management Agenda 

 POA&M Plan of Action and Milestones 

 PRC People’s Republic of China 

 PVO Passenger Vessel Operator 
 99 

 Management’s Discussion and Analysis FY 2005 

Appendix F 

 GLOSSARY OF ACRONYMS 

-S- 

 SBPRA Small Business Paperwork Relief Act of 2002 

 SBR Statement of Budgetary Resources 

 SC Service Contract 

 SERVCON Service Contracts Filing System 

 SES Senior Executive Service 

 Shipping Act Shipping Act of 1984 

 STB Surface Transportation Board 

 SQL Structured Query Language 

-R- 

 RPI Regulated Persons Index 

-T- 

 TEU Twenty-foot Equivalent Unit (container) 

 TIN Taxpayers Identification Number 

 TSP Thrift Savings Plan 

-U- 

 U. S. United States 

-V- 

 VOCC Vessel-Operating Common Carrier