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By Lukas Pleva December 23, 2009
Back to Cut federal contracts

Making progress on trimming federal contracts

During the campaign, Barack Obama promised to review and reform the federal government contracting process. He made the promise in response to significant growth in the use of contractors and the number of noncompetitive contracts. Since 2002, for example, spending on federal contracts has more than doubled. Between 2002 and 2008, noncompetitive contracts increased from $82 billion to $188 billion, according to a report published by the Office of Management and Budget in December 2009.

Since taking office, President Obama has taken numerous steps that put him closer toward fulfilling his promise. At the beginning of 2009, the OMB issued a three-prong list of reforms that it would seek to implement over the next several years. These reforms include achieving 3.5 percent in savings among federal agencies in 2010 and 7 percent by the end of 2010, reducing the use of high-risk contracts for new projects during 2010, and identifying organizations within each federal agency that may be overreliant on contractors.

On Dec. 21, 2009, President Obama announced that 24 of the largest federal contracting agencies have identified more than $19 billion in savings for the upcoming year, putting them on track to meet the 3.5 percent target reduction in 2010. According to the OMB, the agencies have also "identified initiatives to support a 10 percent reduction in money spent through new high-risk contracts" and "each agency has identified at least one pilot initiative where potential overreliance on contractors may be affecting performance."

On Jan. 14, 2010, the White House will also host the White House Forum on Modernizing Government. The purpose of the meeting is to discuss strategies that can help bridge the gap between the federal government and the private sector in the "use of technology to drive productivity and improve service quality."

We will watch and see how this develops, but for now, we rate this promise In the Works.