March 4th, 2009
08:45 AM ET
5 years ago

Obama to sign contract reform memo

WASHINGTON (CNN) - President Barack Obama will sign a memorandum Wednesday morning designed to save the Federal government $40 billion a year by reforming what the White House calls the "broken system of government contracting."

The reforms call for the head of each federal agency to work with Obama's budget director to develop "tough, new guidance" for federal contracts by the start of the next fiscal year on October 1, according to a list of talking points released by administration officials.

Obama's memo will call for a reduction of outsourcing services that the Federal government should perform itself, the talking points said.

The changes would also open up the contracting process to small businesses, end unnecessary no-bid and cost-plus contracts, and strengthen oversight "to maximize transparency and accountability," it said.

The goal is to make sure federal dollars would not go to "line the pockets of contractors who have figured out how to work the system, or to maintain projects that don't work," it said.

"Over the last eight years, government spending on contracts has doubled to over half a trillion dollars," the talking points release said. "Last year, the Government Accountability Office looked into 95 major defense projects, and found cost overruns that totaled $295 billion over the life of the projects."

Obama is scheduled to sign the memorandum at 10 a.m. Wednesday.

–CNN's Suzanne Malveaux contributed to this report.


Filed under: Obama administration
soundoff (42 Responses)
  1. Maggie from Virginia

    Doug,

    Who do you think you're fooling? We see "right" through you.

    March 4, 2009 11:17 am at 11:17 am |
  2. KC

    As long as the Unions don't benefit then I say OK.

    March 4, 2009 11:19 am at 11:19 am |
  3. Dorothy in NC

    It is about time the government has to play by the rules we all do. We have paid for wasteful spending of the government all our lives. I am so impressed and thankful that President Obama is attempting tro change things in Washington. I wish he would go one step farther and start an investigation to see how much Haliburton made during the 8 years of the Cheney presidency and exactly how the money was made.

    March 4, 2009 11:21 am at 11:21 am |
  4. Fanny

    Doug get a life. President Obama can only do so much to make things better and can't go back and demand anything that was done in the Bush era. People need to look at all the positive things President Obama is doing to fix this mess and yet people are bashing him. I am so glad that he is saying suck it up and deal with what he is doing. If he didn't take this attitude he would be weak and wimpie. He is a great leader and he is going to demand justice for the people whether they want justice or not. It President Obama way or guess what you can and he mean you can hit the highway buddy. Go ahead President Obama and provide strict guidelines for everyone one to adhere to and maybe people will understand who is in charge.

    March 4, 2009 11:53 am at 11:53 am |
  5. cnnnewser

    This will surely rile the republicans – their cronies will no longer get the no bid jobs in Iraq (you know, the no bid jobs that made billions in profits for them).

    March 4, 2009 11:54 am at 11:54 am |
  6. SY

    We need better written contracts and well trained people to monitor any contract that the Government awards. In Florida former Gov. Jeb Bush contracted out many services formerly provided by state employees. However, he said that monitoring these companies too closely would get in the way of them making a profit and only bogg them down in government red tape. Suffice it to say some contractors got away with a ton of Florida taxpayer money with no accounting to the citizens of Florida. Some of the contracts he put into place have now gone by the wayside thank goodness. We paid more money for less service simply because no one was allowed to monitor the contracts to be sure the taxpayers were getting what they paid for. Great job, Mr. President.

    March 4, 2009 11:58 am at 11:58 am |
  7. John

    A plan to stop wasteful spending and clean up the contracting process? Can't wait to see all the problems Republicans have with this.

    March 4, 2009 11:59 am at 11:59 am |
  8. Sam Sixpack

    Big government is good government.

    March 4, 2009 12:11 pm at 12:11 pm |
  9. Matthew, Detroit

    DEMOCRATIC SENATORS CAME OUT TODAY TO SAY THEY WILL

    VETO THE NEW SPENDING BILL BEFORE IT GETS TO barack.

    Yep the little man is going to get his first pork barrel veto.

    I salute the Dems standing with McCain to veto the presidents spending

    I am not a big fan of McCain but at least he is trying to stop the spending.
    I also support the Dems that have the GUTS and RESOLVE to stand
    against a naive boy who is spending like a 17 year old girl.

    March 4, 2009 12:11 pm at 12:11 pm |
  10. Mark

    Let's forget about the $410B we blew last week and start cutting wasteful spending. Whats wrong with this picture? Nothing surprises me from this administration.

    March 4, 2009 12:12 pm at 12:12 pm |
  11. Melissa

    And the Republicans said that Obama is all about spending. Good to see them proven wrong even if people like Doug are just all about hatred of Obama while totally ignoring what good it will do.

    Obama is exactly what we've needed. I haven't agreed with everything he's done, but 99% of it has been very very good.

    March 4, 2009 12:21 pm at 12:21 pm |
  12. stormerF

    PAY ATTENTION....Obama has to get congress to go along,that means working with Princess Pelosi and Dingy Harry Reid...How Come he signs a Pork filled Bidget then wants to stop the wasteful spending? Obama should have Stopped it before he signed a Porky Pig spending Budget.. Looks like Hypocrosy to me.

    March 4, 2009 12:29 pm at 12:29 pm |
  13. Griff............... on The Truth...

    CNN set this Snow-Ball rolling, CNN. You are so determined you made the right choice of Obama. There is no World Confidence in this guy. It will just take longer after he is Gone, because you are too Pig-Headed to admit what you have done...

    March 4, 2009 12:37 pm at 12:37 pm |
  14. Kent

    Finally! It took almost five decades for a US president to heed the warning of President Eisenhower. The entrenched position of the huge (and very profitable) defense contractors is as much a threat to our national security as any foreign entity.
    The true sponsors of international terrorism are those who make a profit by it. Eisnhower knew that and told us just that.

    March 4, 2009 12:43 pm at 12:43 pm |
  15. Nelson Colorado Springs Co.

    Well Well what are the Republican party going to now about saving some money. President Barack Obama will sign a memorandum Wednesday morning designed to save the Federal government $40 billion a year by reforming what the White House calls the "broken system of government contracting." "Over the last eight years, government spending on contracts has doubled to over half a trillion dollars," the talking points release said. "Last year, the Government Accountability Office looked into 95 major defense projects, and found cost overruns that totaled $295 billion over the life of the projects."

    March 4, 2009 12:48 pm at 12:48 pm |
  16. Emma, San Jose

    Good move, Mr. President.

    March 4, 2009 12:50 pm at 12:50 pm |
  17. RobK

    Obama better hire some more contracting people, otherwise his new rules will just cause longer delays in getting things to the soldiers. Fed workes will probably have to get 5 quotes in order to buy a new pencil.

    March 4, 2009 01:39 pm at 1:39 pm |
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