Over
the last two years, this Administration has focused on reducing waste
in government spending in an effort to ensure that every tax dollar is
spent wisely. One critical area of focus has been on contracting. During
the last Administration, spending on contracting doubled—too often
resulting in waste, fraud, and abuse.
The
Obama Administration is committed to cracking down on this waste and
strengthening accountability by both reducing and improving the use of
contracts. As a result of an aggressive effort led by President Obama,
contracting decreased for the first time in 13 years last year resulting
in a savings of $80 billion dollars compared to the current growth
trend.
We
are continuing our efforts to strengthen accountability in contracting
as part of the Campaign to Cut Waste, the Administration’s effort to
root out misspent tax dollars. During the recent White House Forum on Accountability in Federal Contracting, OMB announced
a goal of reducing spending on management support service contracts by
15 percent by the end of FY 2012 – a reduction of $6 billion.
Why the focus on management support services, including program management and IT systems development?
- Management support services are frequently cited
as creating a potential risk of overreliance on contractors for
critical activities related to agencies’ missions and operations.
- Over
the past decade, agency spending on contracts for these functions has
nearly quadrupled, going roughly from $10 billion to $40 billion and far
outpacing the already-fast growth in contract spending generally.
- Our
analysis found that agencies are twice as likely to buy these services
using high-risk contract pricing arrangements that put agencies—and
therefore taxpayers—at greater cost risk than when fixed prices are
used.
Where
the services are really needed, agencies must find ways to buy
smarter, by doing things like negotiating lower rates or converting to
fixed-price arrangements. We have heard people ask whether this new
initiative is meant to discourage use of contractors. It is not. Nor is
it intended to curb the Administration’s emphasis on investing in what
works, and ensuring we have the data, evaluations, analyses, and other
studies we need to spend taxpayer dollars wisely.
Contractors
provide valuable services to our agencies, and we will continue to
benefit from their services. However, in this tight budget environment,
agencies simply must be more fiscally responsible in how they acquire
contracted services. Specifically, agencies will need to make decisions
about where they can buy less.
We
will be tracking and posting our progress on the $6 billion goal
regularly, as we continue our efforts to root out waste in contracting.
