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Hoecker Defends FERC First Progress

Hoecker Defends FERC First Progress

Reports that the year-old 'FERC First' effort is in disarray due to clashes between contracted consulting firms over how to revamp the agency are completely unfounded, said Chairman James J. Hoecker last week.

Critics contend that Andersen Consulting and James Martin &amp Co., the two consulting firms contracted to carry out the effort, have been at odds with each other over how to restructure and redesign the Commission's operations, as well as with the internal FERC staff teams that have been assigned to assist them. This not only has caused disruptions to the overall project, but has aggravated staff anxiety and dissension beyond that which would normally attend such a sweeping restructuring, some sources said.

Hoecker flatly dismissed reports of discord between the consulting firms. "I'm finding that James Martin and Anderson can agree for the most part. And the fact that you have two firms like this working on the same project is very common...I think that if anybody thinks there's a battle going on, they just don't understand." Anderson was the sole consultant on the initial phase of the project. However, sources said James Martin &amp Co. of Fairfax, VA, entered the picture when it significantly underbid Anderson for the following phase of the restructuring effort. Both companies are now at FERC, focusing on different areas of the project.

Hoecker noted that Andersen and James Martin have their "strengths and weaknesses" like most companies, which necessitated the use of the two firms. Andersen has a "very strong" project management capability that is critical to the Phase II implementation aspect of the FERC First program now taking place. On the other hand, James Martin's strength is in "information technology," he said, adding that it's doing a "terrific job" in this area. About $4 million of the $7 million earmarked for FERC restructuring has been budgeted for IT.

"I'm real pleased with the way it's going. To some people this [use of two consultants] may look like a lack of confidence in the process or a lack of confidence in the consultants, but I can assure you that's not the case," Hoecker said. "We are most concerned about meeting our deadline and getting the [FERC staff involved] in FERC First back to their regular jobs and keeping our costs contained. We think that this is a good move and we're on the way to doing all of those things."

Hoecker is hoping to have the agency completely revamped by March 2000. Phase I of the FERC First project, which entailed mapping out the general strategy for restructuring the agency, was completed at the end of last June, he said. The Commission is now into the final Phase II implementation, which includes process designs and developing organizational structures for new offices.

The FERC chairman defended the cost-benefit aspect of the reorganization "This is, as these things go, not very expensive...The return to the regulated industries and American taxpayers will be enormous in terms of benefits. Believe me, if I thought this were a waste of money, I wouldn't be spending it," he told NGI in an interview.

He further disagreed with critics who insist the restructuring of the agency should have been handled internally. This is "a very difficult process and you need experts to help you do it. There are a lot of administrators who think that they can simply wave their hand and the bureaucracy will change as a result of their wishes. Well it's a lot more complicated than that," Hoecker said.

"What we're trying to do is something that is successful scientifically in terms of how offices are going to operate and something that will be permanent in terms of changing the way FERC operates" in the future, he said.

As part of the FERC First effort, the Commission so far has announced the start-up of three new offices - the Office of Strategy and Organizational Management, Office of Finance, Accounting and Operations, and the FERC First Project Office. The initial two offices contain parts of what was formerly the Office of Executive Director and Chief Financial Officer as well as other functions. FERC also is expected to announce, among other things, the creation of the Office of Administrative Litigation during the first half of this year. This office would house the attorneys and technical staff who are involved in trials before administrative law judges.

The Office of Strategy focuses on strategic planning performance assessment and is responsible for human resources and leadership development. The Office of Finance's functions include budget funding, internal accounting operations, internal and external accounting policy and other finance-related activities. The FERC First Office is in charge of phasing in the agency's restructuring and will be disbanded when the process is completed in early 2000.

Susan Parker

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