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.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Commerce generally agreed with our overall findings and recommendations. To address our recommendation, CS prepared additional resources and tools to assist its field staff with setting and managing client expectations about export outcomes and dollar value reporting. In May 2011, CS launched an updated Export Success (ES) policy and proved staff training on the new policy. CS also implemented new forms to facilitate export verification and dollar value reporting. In FY 2012, these forms were translated into Spanish, Russian, Portuguese, and Chinese to increase collaboration with buyers in these markets and improve CS's ability to collect U.S. export sales information. Also in fiscal year 2012, CS improved its review of export success records captured in its Client Tracking System (CTS) database and effectively decreased the percentage of incomplete records, according to CS officials. Further, CS modified its Participation Agreement templates to include more specific language about the importance of client reporting CS facilitated exports and their dollar value to CS. Additionally, CS added a field in its eMenu database to capture the dollar value of Follow-on-Sales documenting additional CS facilitated exports that occur within 12 months after the initial export transaction. According to CS officials, these actions have had a positive effect on client reporting of their CS facilitated U.S. exports and increased the number of export success where a dollar value was reported from 2011 to 2013.

    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

  2. Status: Closed - Implemented

    Comments: To address the recommendation, CS, now called Global Markets, took actions to improve its customer-service and created and reported on a client service related performance measure. First, according to Global Markets officials, in March 2012, they centralized all customer survey activities within the Office of Strategic Planning and Resource Management to improve efficiencies and organizational focus. Also, Global Markets created, and in September 2013 implemented, a new 'Client Service Principles' and a 'Customer Bill of Rights' to enhance their customer's experience and improve their customer services culture. Global Markets initiated a Client Recovery Process that was completed in August 2013 and was designed to listen and document customer complaints and improve responsiveness.

    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

  3. Status: Closed - Implemented

    Comments: Commerce generally agreed with our overall findings and recommendations and stated that corrective actions begun during the course of our study would benefit from guidance provided by our recommendations. To address our recommendation, CS undertook and completed a review of the Overseas Resource Allocation Model (ORAM) in 2011. In the process of reviewing the ORAM, CS stated they determined that some previously of the indicators were duplicative and were dropped. In addition, CS (now Global Markets) updated the scope of its contract in 2012 with an economics consulting firm to vet the model's variables to ensure the variables and structure incorporate the best available indicators of potential U.S. exports on an annual basis. The consulting firm did so and found groups of variables with pair-wise correlations within the groups, but said that this was not a short coming as the model is designed to capture the separate effects of multiple variables simultaneously; they recommended retaining several major economic indicators that may be related to each other to provide flexibility in management decision making and noted that they believed this was not a shortcoming.

    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

  4. Status: Closed - Implemented

    Comments: Commerce generally agreed with our overall findings and recommendations and stated that they had begun corrective actions during the course of our study, which would benefit from guidance provided by our recommendations. To address our recommendation, the U.S. and Foreign Commercial Service (now Global Markets), beginning in fiscal year 2012, has undertaken an annual Gap and Opportunity Analysis (GO Analysis) that is designed to include information about commercial diplomacy and advocacy activities when evaluating the costs and benefits of CS overseas locations. The GO Analysis includes data on the demand for commercial diplomacy and advocacy at each location, and according to CS is used by CS Senior Leadership in conjunction with the Overseas Resource Allocation Model (ORAM) to inform resource and personnel allocation decisions, such as which posts need additional/less staff, as well as where new posts should be opened and/or closed.

    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

  5. Status: Closed - Implemented

    Comments: Commerce generally agreed with our overall findings and recommendations and stated that they had begun corrective actions during the course of our study, which would benefit from guidance provided by our recommendations. To address our recommendation, the U.S. and Foreign Commercial Service (now Global Markets) beginning in fiscal year 2012, has undertaken an annual Gap and Opportunity Analysis (GO Analysis) that is designed to include information about the relative level of activity when evaluating the costs and benefits of CS overseas locations. The GO Analysis includes data on demand for services, events, and official visits at each location, as well as an estimate of the time spent on various types of activities. According to CS, this information is used by CS Senior Leadership in conjunction with the Overseas Resource Allocation Model (ORAM) to inform resource and personnel allocation decisions, such as which posts need additional/less staff, as well as where new posts should be opened and/or closed.

    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

 

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