The administration launched NPR in March 1993, when President Clinton announced a 6-month review of the federal government to be led by Vice President Gore. The first NPR report was released in September 1993 and made recommendations intended to make the government “work better and cost less.” The first NPR phase, called NPR I, included recommendations to reinvent individual agencies’ programs and organizations. It also included governmentwide recommendations for (1) reducing the size of the federal bureaucracy, (2) reducing procurement costs through streamlining, (3) reengineering processes through the better use of information technology, and (4) reducing administrative costs. The estimates for NPR I savings covered fiscal years 1994 through 1999. Vice President Gore launched the second NPR phase (called NPR II) in December 1994 and reported on this phase’s savings estimates in September 1995.According to NPR, this second phase expanded the agenda for governmental reform. NPR II efforts focused on identifying additional programs that could be reinvented, terminated, or privatized, as well as on reinventing the federal regulatory process. The estimates for NPR II savings covered fiscal years 1996 through 2000. As shown in table I, NPR claimed estimated savings of $82.2 billion from NPR I recommendations. NPR similarly reported that $29.6 billion had been “locked into place” from program changes in individual agencies under NPR II. In addition to the $111.8 billion NPR claimed from the NPR I and II recommendations, NPR claimed $24.9 billion in estimated savings based on reinvention principles. These additional claimed savings included, for example, $23.1 billion from the Federal Communications Commission’s auctions of wireless licenses. This $24.9 billion brings the total amount of reinvention savings claimed by NPR to about $137 billion. This $137 billion savings figure is the one NPR most commonly cites as the savings it has achieved. NPR relied on OMB to estimate the savings it claimed from its NPR I and II recommendations. OMB’s program examiners were responsible for developing the estimates in their role as focal points for all matters pertaining to their specific assignment area. One of the examiners’ major duties is to oversee the formulation and execution of the budget process. They are also expected to perform legislative, economic, policy, program, organizational, and management analyses. OMB made the initial estimates for the 1993 and 1995 NPR reports and updated its database on the savings claimed in the summers of 1996 and 1997. These updates, according to an OMB official, were primarily to ensure that all the estimates for recommendations that NPR considered implemented were included in the total amount of savings claimed. To describe and assess how OMB estimated the savings from NPR, we focused on three agencies (USDA, DOE, and NASA), where relatively large savings were claimed and that provided a variety of types of actions taken. At each agency, we selected two recommendations with claims of at least $700 million in savings each. The six recommendations we reviewed accounted for $10.45 billion of the $14.7 billion claimed from changes in individual agencies under NPR I and $19.17 billion of the $29.6 billion claimed from NPR II savings. Overall, the claimed savings from the recommendations we reviewed accounted for over two-thirds of the $44.3 billion in savings claimed from NPR’s recommendations to individual agencies and 22 percent of the total amount of NPR’s savings claims. Following is a listing of the six recommendations we reviewed and the estimated savings, in millions of dollars, that NPR claimed for each of those recommendations. (See apps. I through VI for detailed information on each of the recommendations.) reorganize USDA to better accomplish its mission, streamline its field structure, and improve service to its customers ($770 million); end USDA’s wool and mohair subsidy ($702 million); redirect DOE laboratories to post-Cold War priorities ($6,996 million); realign DOE, including terminating the Clean Coal Technology Program; privatizing the naval petroleum reserves in Elk Hills, CA; selling uranium no longer needed for national defense purposes; reducing costs in DOE’s applied research programs; improving program effectiveness and efficiencies in environmental management of nuclear waste cleanups; and strategically aligning headquarters and field operations ($10,649 million); strengthen and restructure NASA management, both overall management and management of the space station program ($1,982 million); and reinvent NASA, including eliminating duplication and overlap between NASA centers, transferring functions to universities or the private sector, reducing civil service involvement with and expecting more accountability from NASA contractors, emphasizing objective contracting, using private sector capabilities, changing NASA regulations, and returning NASA to its status as a research and development center ($8,519 million). Since these recommendations are not representative of all NPR recommendations, our findings cannot be generalized to apply to other savings claimed by NPR. As agreed with your office, we did not independently estimate the actual amount of savings achieved from these six recommendations. We interviewed NPR and OMB officials about how they estimated and claimed savings and also requested relevant documentation. We also examined a database OMB maintained showing the amount of savings achieved from the recommendations. The NPR I data covered fiscal years 1994 through 1999, and the NPR II data covered fiscal years 1996 through 2000. Both sets of data were most recently updated in the summer of 1997. We reviewed NPR data, including a description of the status of the recommendations and reports containing background information, on the three agencies and the relevant recommendations where available. We also interviewed officials from these agencies about the savings OMB estimated for the recommendations we reviewed. We conducted our review in Washington, D.C., from April 1998 through February 1999 in accordance with generally accepted government auditing standards. We requested comments on a draft of this report from OMB, the Departments of Agriculture and Energy, and NASA. These comments are discussed at the end of this letter. OMB generally did not distinguish between NPR’s and other contributions for the agency-specific recommendations we reviewed. NPR attempted to build on prior management reforms and operated in an atmosphere where other factors, such as agencies’ ongoing reforms as well as the political environment, also influenced actions taken to address NPR’s recommendations. The relationship between the recommendations we reviewed and the savings claimed was not clear because OMB attributed a broad range of changes to NPR. Savings estimated from the recommendation to reinvent NASA illustrate how OMB attributed a broad range of changes to NPR and did not distinguish NPR’s contribution from other factors. To estimate savings for that recommendation, OMB consolidated seven somewhat related recommendations into one savings estimate of $8.519 billion. OMB estimated savings by totaling expected reductions to NASA’s entire budget for fiscal years 1996 through 2000. According to a NASA official, NASA’s funding during this period was limited as the result of several initiatives, including direction from the NASA administrator that began before NPR was initiated and congressionally imposed spending caps. Nevertheless, OMB attributed all of the $8.519 billion in savings from estimated reductions in the entire NASA budget to NPR. OMB followed similar procedures in estimating savings from the other NPR recommendation concerning NASA that we reviewed—the recommendation to strengthen and restructure NASA management. The examiner estimated savings of $1.982 billion on the basis of expected reductions in funding levels for one of NASA’s three budget accounts for fiscal years 1994 through 1999. The estimated savings were based on expectations for lower levels of budget authority due to the combined effects of several factors, such as budgetary spending caps and ongoing NASA management reform efforts. In the case of the NPR recommendation for DOE to shift its laboratory facilities’ priorities in response to conditions that accompanied the end of the Cold War, NPR recognized that changes were already under way. For example, as part of this recommendation, NPR called for DOE to “continue” the reduction of funding for nuclear weapons production, research, testing programs, and infrastructure. Considering the comprehensive nuclear test ban treaty agreements and other factors, it was apparent that the DOE laboratories’ priorities would have changed regardless of whether NPR had made the recommendation. However, as figure 1 shows, when OMB estimated savings from this recommendation, it credited all savings from estimated reductions in the weapons activity budget account ($6.996 billion) to NPR. Similarly, efforts related to NPR’s recommendation to reorganize USDA were under way prior to or simultaneously with the NPR recommendation. These efforts included USDA reorganization plans and the introduction of legislation to streamline USDA. For example, the Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994 (P.L. 103-354, Oct. 13, 1994), required USDA to reduce the number of federal staff years by at least 7,500 by the end of fiscal year 1999. Therefore, USDA’s reorganization could be viewed as part of a continuous management improvement effort. OMB attributed the entire $770 million in estimated savings it reported from USDA’s staffing reductions to NPR. In contrast, the relationship between the recommended action and the estimated savings was relatively straightforward for the NPR recommendation to end USDA’s wool and mohair subsidy program. In that case, program costs, primarily subsidy amounts that were reduced by phasing out the program and subsequently eliminated by ending the program, were counted as savings. According to OMB, the procedures and techniques it used to estimate NPR savings were those that it commonly follows in developing the President’s budget. Therefore the NPR savings estimates were to provide a “snapshot” showing the amount of savings OMB expected would result from the recommendations. For example, in 1993, OMB projected savings from the NPR recommendation to strengthen and restructure NASA management covering fiscal years 1994 through 1999. OMB characterized these estimated savings as achieved in 1996, and NPR has continued to report these estimated savings (based on the 1993 estimate) as achieved. More generally, OMB’s savings estimates for agency-specific recommendations included about $34.3 billion in savings that were not expected to be realized until fiscal years 1999 and 2000.