The U.S. government cut the amount it spent on contracts that are awarded without competitive bidding by 10 percent during the first half of fiscal 2010, boosting efforts to reduce costs, the White House said.
Spending on those “no-bid” contracts was reduced by $2 billion, and the amount that went to agreements based on contractors’ costs instead of predetermined prices was cut by 6 percent, or about $500 million.
“By reducing the use of these high-risk contracts we’re making contractors more accountable and saving taxpayer dollars,” Jeffrey Zients, the Office of Management & Budget’s chief performance officer, said in an interview.
President Barack Obama called on federal agencies to reduce contracting expenses by $40 billion per year by fiscal 2011, which begins Oct. 1. In December, Obama announced that the government was halfway to that goal.
Obama is pushing changes to federal spending as a way to pare the budget deficit, which is projected to be a record $1.55 trillion this year.
The administration said it has taken steps such as halting some government technology contracts, a freeze on spending except for defense and national security, and ordering agencies to reduce 2012 budget requests by 5 percent.
The federal government will award about $175 billion in new contracts this fiscal year.
About $75 billion in new contracts were awarded by the federal government in the six months ended March 30, of which about one-quarter weren’t subject to competitive bidding.
Dan Gordon, the administrator of OMB’s procurement policy office, said many agencies enter into no-bid or other high-risk contracts during emergencies and never change the policies.
“It’s inertia,” he said. “What we’re trying to do is get people focused on fiscal responsibility.”
— July 07, 2010, 12:22 AM EDT by Nicholas Johnston, Bloomberg News