December 21st, 2009
11:31 AM ET
7 months ago

Obama: Government contracting reforms will save $19 billion

Washington (CNN) - A government plan to reduce contracting costs will save $19 billion in 2010, President Barack Obama announced Monday.

The savings come from terminating unnecessary contracts, strengthening acquisition management, ending the over-reliance on contractors and reducing the use of high-risk contracts across government, according to documents released with Obama's announcement.

Obama noted government spending on federal contracts more than doubled from 2002, totaling about $540 billion in 2008.

His goal is to cut contracting costs by $40 billion in 2011, the documents said, and the $19 billion savings in 2010 would meet the first-year goal for the program.

At a briefing for journalists before Obama's announcement, a government official outlined one of the ways that contracting costs have been reduced. The U.S. Energy Department's National Nuclear Security Administration has launched a contracting tool in which contractors enter prices, with the lowest price winning the bid, said Jeff Zients, chief performance officer and deputy director of management at the White House Office of Management and Budget.

According to Zients, the program allows contractors to see competing bids and has saved an average of 18 percent per contract. He described it as "eBay in reverse." eBay is an online marketplace where sellers post items for sale in hopes of attracting the highest bid.

Asked if the contract cost savings could affect quality of service, Zients said: "I believe we can save money and improve quality of services we procure."

–CNN's Jennifer Liberto contributed to this story


Filed under: President Obama
soundoff (41 Responses)
  1. Ken in NC

    I wonder how much we would save if we no longer contracted out the services of the Congress to PHARMA, The Health Care Companies and Big Oil? If we had them representing the people again we might get our monies worth from them in their 2 term limit.

    December 21, 2009 12:42 pm at 12:42 pm |
  2. American Expat

    When will the Government start an investigation of that Halliburton sole source contract in Iraq? There were points raised that indicated Mr. Cheney was instrumental in insuring that Halliburton got the award and the award itself was not in conformance with the Federal Acquisition Regulation (FAR), especially allowing it to go on year after year. And, there was an abundance amount of information regarding fraud and abuse in the administration of the contract, including overpricing, irregular payments, and it goes on and on. The American voters should insist that the contract be thoroughly investigated from top to bottom.

    December 21, 2009 12:52 pm at 12:52 pm |
  3. Randolph Carter, I'm no expert but...

    No fair! Halliburton and Blackwater and their pals are not going to be pleased. have a nice day!

    December 21, 2009 12:53 pm at 12:53 pm |
  4. mark

    How about terminating your recless speding obama!

    December 21, 2009 12:55 pm at 12:55 pm |
  5. www.twitter.com/whybs

    No GOP gives Obama credit? The same folks that keep pontificating on government efficiency?

    December 21, 2009 12:57 pm at 12:57 pm |
  6. Cindy

    Just be careful of contractors who under bid, then change order the project to death.

    December 21, 2009 12:58 pm at 12:58 pm |
  7. Enough

    Blah, Blah, Blah..........get Obama out of office and we can save trillions. This man is talking peanuts, the way he has been spending our money. What about getting the pork out of the new spending bill?

    December 21, 2009 01:02 pm at 1:02 pm |
  8. RepublicanCommunismWorse

    Now the right wingnuts will say that McCain could have saved $19,000,000,001. Armed with his magic pen, he could have slashed everything but war expenditures.

    December 21, 2009 01:03 pm at 1:03 pm |
  9. southerncousin

    What would reallly help is ending getting rid of any language that gives a union preference. That way instead of getting half the work for twice the money, we could actually get things done right, fast and a lot cheaper, but that will never happen under Hugo Obama's watch. The unions, particulary SEIU/ACORN put him in office and SEIU/AARP has helped him and the other libertard pass this unconstitutional, bank breakin takeover of our healthcare, with the unions, of course, exempted from extra taxes on their "cadillac" plans. Obama, one and done.

    December 21, 2009 01:03 pm at 1:03 pm |
  10. enough

    Can anyone still believe this guy? He is destroying this great country. I originally came from a socialist country and know how bad that system is. I chose to stay in this country because I love American system and people. Obama is leading this country to wrong direction. I pray every day God bless this wonderful country!

    December 21, 2009 01:04 pm at 1:04 pm |
  11. shmeckell

    If you want to create a disaster while building something, hire all low bidders.

    December 21, 2009 01:05 pm at 1:05 pm |
  12. GG

    Can President Obama make any sort of public comment without blaming Bush for something? It's beyond the point of distasteful and is probably counterproductive politically as it reinforces the perception that he is weak.

    December 21, 2009 01:10 pm at 1:10 pm |
  13. Matt

    Leave it to a Democrat to clean up the bloated government growth from the previous republican administration.

    December 21, 2009 01:15 pm at 1:15 pm |
  14. chubby

    This is another of nobamas piles of bull. It is along the same line as his jobs bill that has saved or created 1.6 million jobs. This puppet of the liberal media must be sent back to Illinois in 2012.

    December 21, 2009 01:15 pm at 1:15 pm |
  15. Jim

    Something has to be done about procurement. There also needs to be some mechanism for correcting faulty specs. Price is one thing, but what happens is people in the government set specifications that only one vendor can meet. I think we should post everything on the internet and have a reward system for people who find fraud and inefficiencies.

    December 21, 2009 01:15 pm at 1:15 pm |
  16. Jane

    Let me know where i can get hired on for a gov job. Put in for over 40 jobs this year and had no luck. Apparently it's who you know not what you know or based on your qualifications, veteran's service or being prior civil service ( of all I have in my resume) Thanks for nothing Obummer.

    December 21, 2009 01:16 pm at 1:16 pm |
  17. Dutch/Bad Newz, VA

    This is sure to get Dick Cheney and his Halliburton buddies panties in a bunch.

    December 21, 2009 01:21 pm at 1:21 pm |
  18. Silence Dogoode

    Right, Obama is in bed with the biggest union ever...we know how honest those guys are......

    December 21, 2009 01:25 pm at 1:25 pm |
  19. Claudia, Houston, Tx

    And while you're at it make sure Cheney/Halliburton pay back what they owe American taxpayers before running off under cover to Dubai. And when they pay back don't award Halliburton or any of it's subsidiaries not one contract. It was totally unethical for Dick Cheney to make Federal deals for Halliburton which were in the works while he was CEO and he has never stopped his involvement.

    December 21, 2009 01:26 pm at 1:26 pm |
  20. TRA

    It's about time. Again, a Democrat has to clean up another horrible mess left by a Republican.

    December 21, 2009 01:27 pm at 1:27 pm |
  21. Sniffit

    What will be funny is listening to GOPers/neoclowns find a way to complain about this. They're 100% opposed to individuals "sucking at the gov't teat," but when it comes to businesses like Haliburton...well...all bets are off.

    December 21, 2009 01:32 pm at 1:32 pm |
  22. Liberal wingnut

    Obama this isn't your presidential campaign. You have to actually DO something to reduce the deficit not triple it.

    December 21, 2009 01:38 pm at 1:38 pm |
  23. unemployed by Obama and cannot find work

    there is NO TRUTH in the obama statement, it was all spent on thr backroom deals in chicago style and Obama under the table. Obama has played his hand and the majority of people should call for his impeachment.

    December 21, 2009 01:39 pm at 1:39 pm |
  24. marcia

    hogwash!

    December 21, 2009 01:42 pm at 1:42 pm |
  25. GI Joe

    HA – get rid of all the contractors that are giving kick-backs to the sleazy republicans. (Can anybody say bye bye haliburton? Or whatever name they have now trying to deceive people by changing their name).

    December 21, 2009 01:45 pm at 1:45 pm |
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