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.