Obama: Big changes coming in federal contracting

President Barack Obama said he wants an overhaul of government contracting and signed a presidential memorandum to launch the effort today.

“It’s time for this waste and inefficiency to end,” he said at a news conference. “It’s time for a government that only invests in what works.”

Obama said the Office of Management and Budget will issue governmentwide guidance by Sept. 30 on the appropriate use and oversight of sole-source and other types of noncompetitive contracts. But he added that he wants to see more full and open competition for contracts.

By July 1, OMB will develop more detailed guidance to help agencies review their existing contracts to identify wasteful ones that are unlikely to meet their needs, the memo states.

Obama said he wants agencies to better oversee all types of contracts and carefully consider the agencies’ needs before signing any deal. The changes would minimize the risks for government and boost the value of contracts, he said.

“We will end unnecessary no-bid contracts and cost-plus contracts that run up the bill that is paid by the American people,” he said. The reforms would save the government $40 billion each year, he added.

Obama also wants to clarify when it’s appropriate to outsource federal work and help agencies find the appropriate size and experience for the federal employees who develop and oversee acquisitions.

Obama focused largely on defense contracting but said the reforms will span all agencies. He cited a 2008 Government Accountability Office study of 95 Defense Department weapon programs that found cost overruns of $295 billion and average delays of 21 months.

“I can assure you that this will be a priority for my administration," Obama said. "It’s time to end the extra costs and long delays that are all too common in our defense contracting.”

Obama said he wants agencies to enter into contracts that will bring value, adding that agencies have wasted money through poor planning while giving contractors ample opportunities to take advantage of the government.
 
“It is essential that the federal government have the capacity to carry out robust and thorough management and oversight of its contracts,” the memo states.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

Reader comments

Fri, Mar 13, 2009

nothing will change. he thinks by asking nicely, corruption and wasteful spending will go away? just stop the government funding and return the money to the poeple.

Tue, Mar 10, 2009 ANGELA WAY HERNDON

I am currently working into a Contract Spec position in the fed govt. If we could give solutions to probelms with a positive attitude towards change and stop walking backward with our eyes wide shut we could certainly turn this around. If President Obama was not concerned about waste in contracting then we should be concerned. Everyone has to take responsibility for what we have done and make the wrongs right as best you can. Rome was not built in a day nor was it destroyed in the same day. Time is of the essence. Think, tomorrow is not promised but we all have today, talk, write, communicate, become active in your community politics to make a world of a difference. I am not the top advocate of fed contracting but I am working toward being one of the best fed govt contract specialist through training and reading forums such as this. I am convinced all this will work out with a combined work out involving everyone!

Sat, Mar 7, 2009

Yeah thats all nice, but we are still 95 programs with 300 billion dollars in overcost, and 21 months delayed. No matter what type of contract type you want to say is better. It comes down to, how do we get these contractors to do, what they say they are gonna do, with the money they said initially they need for the project. Even better lets get the federal government to do the project instead, and employ 3 million workers.

Fri, Mar 6, 2009 Rockville, MD

Government needs experienced and qualified contracting staff. There are so many experienced contract administrators, negotiators and contracting officers. Most of them are retired from the Federal Government. However, some of them want to work as Personal Service Contractors (PSC). Most Government agencies do not hire them as PSC. They do not have budget for additional people. Agencies like Department of State and U.S Agency for International Development (USAID) are smarter than the rest of the agencies. So they hire the retired feds back. If more agencies are doing like DoS and AID they wouldn't have that much problems. Many young graduates don't want to work in the acquisition profession because it is not easy and in the other hand,people can't learn within a year. It takes time to become a real effective contracting staff. So, Mr. President if you want the agencies to have a better scrutiny in contracts administartion, please urge the Federal Agencies to hire back some of the retirees who are interested in the contracting. I agree with the President, contractors will take advantage of the Government. So we need experienced and competent individuals to deal with the greedy contracors.

Fri, Mar 6, 2009 1102 VA

More oversight promised from someone so uneducated on acquisition that they use the term “no bid.”

Regardless of who won the election we knew it would be bad, neither of them educated themselves or even surround themselves with educated people. They conciliate the public and use terms that have no meaning in acquisition.

Industry LOVES fixed price contracts when the requirements are uncertain because they price in risk and unrealized risk goes to profit. It is not industry’s bad practice – if the Govt cannot define their requirement then industry has to protect themselves. The Govt cannot define the requirement because Clinton reduced the workforce and we don’t have anyone left who knows how to write a technical SOW/SOO. So we rely on contractors and we get slammed for that.

The American tax payer needs to educate themselves. Read for yourself before you develop an opinion. Waste, fraud and abuse – I’ll give you a perfect example of it – it is all the money your US Congress has spent trying to identify W, F&A in Iraq. I am an 1102 who was there, who has sat on both sides of the table.

Become educated, then opinionated.

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