National Export Initiative:

U.S. and Foreign Commercial Service Should Improve Performance and Resource Allocation Management

GAO-11-909: Published: Sep 29, 2011. Publicly Released: Oct 31, 2011.

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Recognizing the potential of increased exports to drive economic growth and create jobs, President Obama in 2010 launched the National Export Initiative (NEI), aimed at doubling the dollar value of U.S. exports by the end of 2014. As requested, GAO examined the extent to which (1) the goals and activities of the U.S. and Foreign Commercial Service (CS) support the NEI, (2) CS performance measures accurately reflect its activities and align with the NEI, and (3) CS incorporates relevant data in allocating resources to help achieve its strategic goals. GAO interviewed Department of Commerce (Commerce) officials, particularly from CS, and CS staff and officials at six overseas posts. GAO analyzed the NEI's priorities, and documents and data related to CS activities and performance.

CS's goals and activities generally support NEI priorities by, for example, arranging trade missions, assisting U.S. exporters with trade problems, and advocating on behalf of U.S. firms competing for foreign government contracts. The NEI has not required CS to undertake new activities; however, it has prompted CS to direct more of its efforts toward certain markets, activities, and sectors and to shift its focus from firms that are new to exporting to firms already exporting, as firms exporting to new markets or increasing exports to markets in which they are already active produce the greatest share of export successes. In fiscal year 2012, CS will implement revised performance measures that align more closely with the NEI. Although CS did not meet four of its six performance targets in 2010, it achieved increases in most of its measures as it shifted to address NEI priorities. CS's revised performance measures for fiscal year 2012 address some past weaknesses; however, some weaknesses will remain--for example, the lack of a measure for customer-service satisfaction and the clients' underreporting of export successes, especially with regard to dollar value. CS's new measures necessitate that export success data be complete and accurate; otherwise, CS's efforts to support the NEI goal will be undervalued and policymakers will not have an accurate picture of CS's performance. CS's resource allocation management process does not make full use of relevant information to guide its decisions. CS is using a data-driven process to prioritize foreign markets (and domestic locations) and to help it allocate staff and other resources to meet its performance goals and support NEI objectives. GAO's analysis of the quantitative parts of the process, however, found that there may be opportunities to reallocate overseas resources to better reflect NEI priorities and better achieve CS's new performance goals. The overseas model, designed to reflect export potential of partner countries, currently gives greater weight to historical variables that have a high degree of overlap with the other historical inputs in the resource allocation process. Also, the process does not systematically consider important available data on commercial diplomacy and advocacy, which are related to CS performance goals, and program activity data on how CS staff divide their time. Including such data in the process would help Commerce managers make decisions informed by the best available information. GAO recommends that the Department of Commerce (1) take steps to improve the CS customer-service survey response rate and include customer-service-related data in its performance measures, (2) take further steps to achieve greater cooperation by CS clients in reporting the dollar value of export successes, (3) review CS's Overseas Resource Allocation Model to determine whether its variables and structure best incorporate available indicators of potential U.S. exports, (4) include commercial diplomacy and advocacy data in evaluating cost-benefit ratios of CS locations, and (5) systematically include activity data in making resource allocation decisions. Commerce welcomed and generally agreed with the overall findings and recommendations in the report.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: The Secretary of Commerce should direct the Under Secretary for International Trade and the Assistant Secretary for Trade Promotion to include commercial diplomacy and advocacy data in evaluating cost-benefit ratios of CS locations to improve program management and the information that CS resource allocation decisions are based upon.

    Agency Affected: Department of Commerce

    Status: Open

    Comments: To improve program management and the information the Commercial Service (CS) resource allocation decisions are based upon, including commercial diplomacy and advocacy data in evaluating cost-benefit ratios of its locations, CS updated its Commercial Diplomacy Success (CDS) Policy. They also planned to update the data-base used for tracking CDS. Additionally, the Office of International Operations undertook a Gap and Opportunity Analysis of its overseas posts, to determine demand for CS services, which was to be combined with an Overseas Resource Allocation Model to inform resource and personnel allocation decisions for fiscal year 2012. Finally, CS planned to review its Advocacy Center metrics in an effort to seek greater alignment with its overall metrics and to improve program management and resource allocation decisions by the end of May 2012. GAO continues to monitor Commerce's progress on this recommendation.

    Recommendation: The Secretary of Commerce should direct the Under Secretary for International Trade and the Assistant Secretary for Trade Promotion to review the Overseas Resource Allocation Model to determine whether the variables and structure best incorporate available indicators of potential U.S. exports to improve program management and the information that CS resource allocation decisions are based upon.

    Agency Affected: Department of Commerce

    Status: Open

    Comments: To improve program management and the information that Commercial Service (CS) resource allocation decisions are based on, CS planned to review its overseas resource allocation model with the goal of balancing the predictive and historical economic indicators it uses. Additionally, the CS Office of International Operations (OIO), planned to augment the model used with comprehensive cost and performance data, particularly commercial diplomacy and advocacy successes, allowing CS to more systematically measure cost and program effectiveness against export potential. CS planned to undertake these efforts in the first quarter of calendar year 2012. GAO continues to monitor Commerce's progress on this recommendation.

    Recommendation: The Secretary of Commerce should direct the Under Secretary for International Trade and the Assistant Secretary for Trade Promotion to take steps as appropriate to improve the CS customer-service survey response rate and include the measure in its GPRA-related reporting to improve government services in keeping with the Government Performance and Results Modernization Act of 2010.

    Agency Affected: Department of Commerce

    Status: Open

    Comments: To improve customer service survey response rates and include the measure in its GPRA-related reporting, ITA & Commercial Service (CS) planned several efforts in 2012, such as developing and implementing procedures to centralize all customer survey activities with the Office of Strategic Planning & Resource Management, enhancing and standardizing the customer survey content and delivery process, and implementing a "Customer Bill of Rights," as well as initiating a process to determine why clients are not responding. Additionally, as part of its President's fiscal year 2013 budget submission, CS working in collaboration with Commerce and OMB planned to develop a new customer satisfaction metric, providing a more balanced set of performance indicators for CS. GAO continues to monitor Commerce's progress on this recommendation.

    Recommendation: The Secretary of Commerce should direct the Under Secretary for International Trade and the Assistant Secretary for Trade Promotion to take further steps to achieve greater cooperation by CS clients in reporting the dollar value of export successes in order for policymakers to have accurate and complete information to make performance management and resource allocation decisions.

    Agency Affected: Department of Commerce

    Status: Open

    Comments: To achieve greater cooperation from Commercial Service (CS) clients in reporting the dollar value of export successes, Commerce planned to take the following actions in 2011 and 2012: modifying the scope of work section of its Participation Agreement template to include specific language that reporting the dollar value successes resulting from CS assistance is integral to the agreement; institute two forms to better capture export successes - the U.S. Exporter Verification of Successful Outcome and Foreign Buyer Verification of Successful Outcome. Additionally, CS launched a Client Information Form, which outlined their goal of helping clients achieve export successes and included an expectation that clients report any export sales and related agreements resulting from CS assistance. This form is part of the client intake process. GAO continues to monitor Commerce's progress on this recommendation.

    Recommendation: The Secretary of Commerce should direct the Under Secretary for International Trade and the Assistant Secretary for Trade Promotion to systematically include program activity data in making resource allocation decisions to improve program management and the information that CS resource allocation decisions are based upon.

    Agency Affected: Department of Commerce

    Status: Open

    Comments: To improve program management and the information that Commercial Service (CS) resource allocation decisions are based on by systematically including program activity data in making resource allocation decisions, ITA planned to use demand for CS services, existing coverage, and market opportunities captured in the Gap and Opportunity Analysis and data in the Overseas Resource Allocation Model, to inform resource and personnel allocation decisions for overseas posts, for fiscal year 2012. Likewise, domestically, the CS Office of Domestic Operations undertook a Gap and Opportunity Analysis of its U.S. Export Assistance Centers. The analysis captured performance results, demand for services, coverage, and opportunities, and was to be used in conjunction with the Domestic Resource Allocation Model to inform resource allocation decisions for fiscal year 2012. GAO continues to monitor Commerce's progress on this recommendation.

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