Management and Performance Challenges Identified by the Inspector General

Inspector General’s Statement Summarizing the Major Management and Performance Challenges Facing the United States Patent and Trademark Office

Jon W. Dudas
Under Secretary of Commerce for Intellectual Property
Director of the United States Patent and Trademark Office

We are providing our summary of OIG's top management challenges for the United States Patent and Trademark Office (USPTO) in accordance with the Reports Consolidation Act of 2000 (P.L. 106-531). Detailed information about our work is available on our web site at http://www.oig.doc.gov/.

Successfully Operate USPTO as a Performance-Based Organization

USPTO's successful operation as a performance-based organization remains a management challenge. It is essential that USPTO effectively use its expanded authority over budget allocations and expenditures, personnel decisions and processes, procurement, and information technology operations to process high-quality patents and trademarks in a timely manner. The inherent difficulties of successful operation as a performance-based organization coupled with our recent work indicate a number of areas that require management's attention.

For example, in our evaluation of patent examiner production goals, awards, and performance appraisal plans to determine their effect on employee output we found that (1) examiner goals have not changed since 1976 to reflect efficiencies in work processes; (2) examiners' appraisal plans are not linked to their supervisors' goals or to those of USPTO; and (3) examiner awards do not appear to be having their intended impact of stimulating production.

Likewise, in response to complaints and a related request from the agency's chief financial officer/chief administrative officer, we reviewed the Office of Human Resources' efforts to hire a human resources (HR) director and related matters. We found, among other things, that the process used to fill the position was seriously flawed and that USPTO needed to clarify its relationship with the Office of Personnel Management and establish sufficient HR policies and procedures.

Finally, we recently reviewed progress on construction of USPTO's headquarters complex in Alexandria, Virginia, and its relocation to these facilities. We found that USPTO and the General Services Administration have provided adequate management and financial oversight of the project; however, additional costs have been incurred and space planning for future growth has not been properly addressed.

Effectively Manage Acquisition Process

As Commerce entities' reliance on contractor-provided services increases, so does the challenge to effectively manage the streamlined acquisition processes these initiatives fostered, while ensuring that taxpayer dollars are wisely spent and laws and regulations followed.

PTO has been granted authority to make purchases and enter into contracts without regard to the Federal Acquisition Regulation. In 2003, PTO established the Patent and Trademark Acquisition Guidelines, which are designed to promote flexibility and innovation in procurements. As it utilizes this new authority, PTO needs to ensure that its managers are committed to proper acquisition oversight. Focused and sustained attention is necessary to ensure USPTO's effective and efficient utilization of the flexibilities provided to it as a performance-based organization.

Enhance Emergency Preparedness, Safety, and Security of Facilities and Personnel

USPTO along with other Commerce facilities in the Washington, D.C.area, and most federal entities across the nation has taken steps to improve the safety and security of its people and property. As it moves to complete and occupy its new headquarters facilities, USPTO must be sure to incorporate all the necessary security safeguards and to periodically reassess its security status and adjust protective measures accordingly.

Sustain Progress in Information Technology Security

We are pleased to note that USPTO's material weakness for information security, cited as a management challenge in the past, has been resolved. USPTO reported all its mission-critical systems as certified and accredited, and our recent review conducted in accordance with FISMA confirmed the adequacy of its certification and accreditation materials.

And while noting that USPTO has made significant progress in information technology security, sustaining this progress and maintaining the security of its systems remains a management challenge for USPTO.

Continue to Improve Strategic Planning and Performance Measurement

Reliable and credible performance data are essential to the goal of linking program performance and budget decisions. We have previously noted the USPTO's strong commitment to report performance data and its use of internal controls to better ensure that the data it reports is reliable. USPTO should continue to take steps to enhance the credibility of its performance data.

Johnnie E. Frazier
Inspector General