Federal agencies have submitted plans to the White House to save $19 billion through improvements to their contracting and acquisition practices this fiscal year, and are on target to meet a goal of $40 billion in savings by fiscal 2011, OMB has said.
Federal contracting totaled $540 billion in fiscal 2008, double the level in fiscal 2002, and in March President Obama called for savings through strengthened contracting practices and management oversight. OMB said agencies would achieve 3.5 percent in savings during fiscal 2010, and 7 percent by the end of fiscal 2011.
Agency plans include initiatives to terminate or reduce programs and related contracts, cut costs by in-sourcing and save money through strategic sourcing.
For example, OMB praised a NASA decision to break into smaller contracts a large cost-reimbursement contract covering operations and maintenance at its Michoud Assembly Facility in Louisiana that it says could result in $89 million reduction to a five-year budget plan.
DHS is taking advantage of department-wide purchasing power to negotiate changes to its IT contracts, OMB also noted.
It said the department expects to save $87.5 million during the next six years while making more than 180 products available to users.
Agencies have identified at least one pilot project where potential over-reliance on contractors may be affecting performance, and through those pilots, agencies will determine the best mix of in-house talent, contractor skills, and workforce size to help the organization operate at its best, OMB said.
It said agencies are also working to reduce by at least 10 percent in fiscal 2010 the dollars that they commit non-competitive, cost-reimbursement, or time-and materials contracts.
