Federal contract spending remained flat in 2011

Government spending through contracts remained the same in fiscal 2011 as it was in fiscal 2010, the Office of Management and Budget reported Feb. 24.

Agencies collectively spend $535 billion in both 2011 and 2010, the first time 13 years that federal spending had either decreased or remained flat.

“There is good reason to be optimistic that this bending of the procurement spending curve that agencies worked so hard to achieve in fiscal 2010 and fiscal 2011 will continue for the foreseeable future,” Danny Werfel, controller of the Office of Federal Financial Management at OMB, wrote today in post on the OMBlog.

Agencies are using smart contracting strategies, such as strategic sourcing, while reducing spending on administrative activities, such travel, IT and printing, Werfel wrote.

Agencies will be well on their way to meeting the goal of a 15-percent reduction in spending on management support services, he wrote. Those types of services include IT systems development, program management and engineering services. Spending on those services quadrupled during the George W. Bush administration.

OMB wants the reduction by the end of fiscal 2012. To reach it, the government has to bring spending down by $6.7 billion governmentwide to $37.4 billion.

“With dedicated management attention, agencies already have reversed the costly growth in this area and have brought spending down by 7 percent, or $3 billion, in just the last fiscal year,” Werfel wrote.

About the Author

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

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