Obama to order major contracting reforms today


Update,10:40 a.m.: The President has made the big contracting reform announcement.

He called the government’s contracting system “broken” and said it was “plagued by massive cost overruns and outright fraud.”

He added:

We need more competition for contracts and more oversight when they’re carried out.

Ending the “unnecessary” use of sole-source and cost-based contracts, ensuring that government work isn’t improperly outsourced and opening more contracts to small businesses will save the government $40 billion of the $500 billion spent on contracts annually by increasing competition and reducing waste, he said.

These estimated cost savings are part of the $2 trillion in cuts in announced in last week’s budget.

President Barack Obama is expected to sign a memo today ordering the Office of Management and Budget to draft new contracting rules by the end of September, the Associated Press is reporting.

AP reported that the memo would “change how contracts are awarded and who can earn them, a move his aides say would save taxpayers about $40 billion a year by making the process more competitive.”

According to AP, the memo is expected to:

  • Halt the outsourcing of federal employee jobs through public-private competitions.
  • Open more contracts to small businesses.
  • Eliminate “unnecessary” sole-source contracts.

Stay tuned to FederalTimes.com. We’ll bring you more as this story develops.


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