Obama vows to reform government contracting

An overhaul of government contracting is on the way as President Barack Obama signed a presidential memorandum today to take on what he calls "waste and inefficiency."

"It’s time for a government that only invests in what works,” he said in a news conference.

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

OMB will develop more guidance by July 1 on how agencies should review their existing contracts. The intent is to find wasteful contracts that are unlikely to meet the agency’s needs, the memo said.

Obama also wants agencies to better govern the appropriate use of all types of contracts while considering the agencies’ needs before signing the contract. The changes would minimize the risks for government and boost the value of the 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 coming reforms would save the government $40 billion each year, he said.

Obama also wants to clarify when it’s appropriate to outsource federal work while helping agencies find the appropriate size and experience of the acquisition workforce as those employees develop and oversee acquisitions.

Obama focused largely on defense contracting, but said the reforms will span all of government. He cited a 2008 Government Accountability Office report that said contracting costs for 95 Defense Department weapon programs grew by $295 billion from their  first estimates and were delayed by an average 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 to them, adding that agencies have wasted money through poor planning while giving the contractor amble 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.