President Takes Aim at Contracting Fraud, Waste, Abuse
(Reuters Photo/Jim Young)
President Obama announced today procurement reforms designed to improve competition for federal contracts, while curbing fraud and waste. He said these reforms would save American taxpayers up to $40 billion a year and help usher in a new era of fiscal responsibility.
Flanked by senators Carl Levin and John McCain -- both longtime foes of wasteful spending -- Obama said he had directed OMB chief Peter Orszag to draft "dramatic" new procurement rules that would improve how the government spends more than a half-trillion dollars each year. He formally issued a "Presidential Memo" spelling out his aims.
His announcement at the Eisenhower Executive Office Building, adjacent to the White House, follows years of chronic procurement problems, including a massive increase in the use of less than fully competed contract and a persistent shortfall in the number of federal contracting workers.
"Now, none of this will be easy," Obama said. "We'll have to end old ways of doing business. We'll have to take on entrenched special interests. We'll have to break bad habits that have built up over many years, but we can't keep spending good money after bad. All across America, families are making hard choices, and now we're going to have to do the same. "
The White House issued a "fact sheet" shortly before the president made his remarks. Among other things, it says:
"Government spending on contracting has more than doubled in the last eight years. Government spending on goods and services increased from $200 billion in 2000 to over $500 billion in 2008."
"A study last year by the Government Accountability Office
of 95 major defense acquisitions projects found cost overruns of 26 percent, totaling $295 billion over the life of the projects."
"The Memorandum directs the following:
"The Director of the Office of Management and Budget shall collaborate with the Secretary of Defense, the Administrator of the National Aeronautics and Space Administration, the Administrator of General Services, the Director of the Office of Personnel Management, and others to development procurement reform guidance.
"By July 1, 2009 - OMB shall issue government-wide guidance to assist agencies in reviewing, and creating processes for ongoing review of, existing contracts in order to identify contracts that are wasteful, inefficient, or not otherwise likely to meet the agency's needs.
"By September 30, 2009 -- OMB shall issue government-wide guidance to:
(1) Govern the appropriate use and oversight of sole-source and other types of noncompetitive contracts and to maximize the use of full and open competition and other competitive procurement processes;
(2) Govern the appropriate use and oversight of all contract types, in full consideration of the agency's needs, and to minimize risk and maximize the value of government contracts generally;
(3) Assist agencies in reviewing the capacity and ability of the Federal acquisition workforce to develop, manage, and oversee acquisitions appropriately; and
(4) Clarify when governmental outsourcing for services is and is not appropriate."
In his remarks today, Obama said, "Over the last eight years, government spending on contracts has doubled to over half a trillion dollars. Far too often, the spending is plagued by massive cost overruns, outright fraud and the absence of oversight and accountability. ... We are spending money on things that we don't need, and we are paying more than we need to pay, and that's completely unacceptable."
While the problem plagues the entire government, Obama said, it is particularly acute in defense contracting. He pledged to "do whatever it takes to defend the American people." But he rejected "the false choice between securing this nation and wasting billions of taxpayer dollars."
Let us know what you think.
Staff writer William Branigin contributed to this report.
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