Government reports $15B in contract cuts, first reduction since 1997
In what administration officials describe as a major milestone, the federal government cut $15 billion in contract spending between fiscal 2009 and 2010, the first year-to-year contracting cuts since 1997.
Contracts for products and services supplied to the government by private firms totaled $535 billion in fiscal 2010, down from $550 billion the year before, the White House said. With those cuts, the Obama administration is on course to achieve its two-year goal of eliminating at least $40 billion on contract spending, according to Office of Management and Budget Deputy Director Jeffrey D. Zients.
"We have reversed the trend of uncontrollable growth," Zients said in announcing the cuts. "We're saving money and making sure every taxpayer dollar is being well-spent. We certainly have much work to do."
Dan Gordon, the administration's top contracting official, said much of the cuts came from the cancellation of overdue information technology contracts at the departments of Homeland Security, Justice, Treasury and Veterans Affairs and by having agencies pool the purchase of costly software licenses.
"When agencies across the government are buying the very same software, but doing it through a series of individual contracts, we're not getting the benefit of being the world's largest customer," Gordon said.
In hopes of making deeper contracting cuts, President Obama's fiscal 2012 budget will call for a 10 percent reduction in professional and technical service contracts, a part of contract spending that has "grown disproportionately in the last decade," Gordon said.
Also, in a nod to the administration's pro-business job growth initiatives, agencies will be pushed to increase the number of small businesses hired for contracts, Gordon said.
"All too often, barriers to entry prevent us from getting those small business into the federal marketplace," he said. "Getting more federal business to small business can help them get the revenue they need to get jobs and drive our economy forward."
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| February 3, 2011; 11:39 AM ET
Categories: Administration, Contracting
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