New Contracting Rules

[HuskyCaucasian]

March 4 (Bloomberg) -- President Barack Obama will order administration officials to set new rules on government contracting in a bid to cut as much as $40 billion in federal spending, a White House official said.

 

Obama, who will sign a presidential memorandum later today, will call for an overhaul of a “broken” system of government contracting, whose spending has doubled over the past eight years to more than half a trillion dollars, according to the official, who spoke on condition of anonymity.

 

The Democratic president is seeking to halt outsourcing of work that could be done by the government and to open up contract bidding to small businesses. He also wants to increase oversight of weapons acquisitions and end unnecessary “no-bid” contracts, the official said.

 

Such actions could save taxpayers as much as $40 billion a year while also improving the quality of government service, Obama will say, according to the official.

 

White House budget director Peter Orszag will work with Obama’s Cabinet officials and agency chiefs to come up with new, more stringent guidance on contracting by the end of September, according to the official.

 

Obama will stress his commitment to maintaining a strong military while at the same time calling attention to billions of dollars in wasteful spending at the Defense Department.

 

The U.S. military has spent $1.7 trillion on new weapons so far this decade, according to a Pentagon study. Of that amount, more than half -- $919 billion -- accumulated as program costs grew.

 

Procurement Process

 

Obama will acknowledge steps taken by Defense Secretary Robert Gates to overhaul the procurement process and praise work done on the issue by Senate Armed Services Committee Chairman Carl Levin, a Democrat, and Senator John McCain, the top ranking Republican on the panel.

 

The senators have proposed a measure that calls for programs to be frozen and reviewed when they exceed their original cost estimate by 50 percent.

 

Obama promised on the campaign trail to reduce cost overruns, end no-bid contracting and improve oversight of defense acquisitions. The president’s announcement today follows the unveiling of his $3.55 trillion budget plan last week.

 

The proposal contains savings in part from a reduction of Defense Department procurement programs.

[hawksfan61]

Getting rid of all no-bid contracting will not save any money. Anyone who has been involved in government contract work can attest to that. I know no-bids get a bad rap because of the Iraq thing, but the fact is there are situations where bids are not necessary, only because certain specialized projects have only a few firms that are qualified to provide the service.

 

The requirement to freeze and review any project that goes over 50% of the original estimate is pretty funny too. I have yet to work on a federal project that doesn't go over budget, and a good portion of that is due to the incompetence or the indecisiveness of the government agencies.

Edited March 4, 2009 by hawksfan61

[Texsox]

Getting rid of all no-bid contracting will not save any money. Anyone who has been involved in government contract work can attest to that. I know no-bids get a bad rap because of the Iraq thing, but the fact is there are situations where bids are not necessary, only because certain specialized projects have only a few firms that are qualified to provide the service.

 

We talk about how government needs to be more like private industry then force them into not being more like private industry.