President Obama Seeks to Reform Federal Contracting

President Barack Obama announced an initiative to reform federal government contracting practices. His memorandum for the development of new contracting procedures addresses the following:

• Reduce the number of sole (or limited) source contracts that are not procured through a competitive process
• Establish fixed price contracting as the preferred method of contracting instead of cost-reimbursement contracting
• Determine whether various functions should be performed by government employees instead of outsourcing them. Outsourcing has been a major trend over the last eight years.

Obama's March 4, 2009 memorandum also directs the Office of Management and Budget to provide guidance to federal agencies by July 1, 2009 about how to identify wasteful and inefficient contracts. By September 30, 2009, OMB is charged with developing guidance to address the contracting issues identified above.

The President said the following in his remarks on March 4, 2009: "It's time to end the extra costs and long delays that are all too common in our defense contracting. We need to invest in technologies that are proven and cost-effective. We need more competition for contracts and more oversight as they're carried out. If a system isn't ready to be developed, we shouldn't pour resources into it. And if a system is plagued by cost overruns, it should be reformed. No more excuses, no more delays. The days of giving defense contractors a blank check are over." For more information about President Obama's efforts to reform government contracting:

• The President's memorandum on contracting reform
  
• White House Blog on contracting reform
• Text of the President's remarks on March 4, 2009
  
• Associated Press article