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OMB Report Claims $19 billion in Contracting Cost cuts

According to a recent report in the Washington Post, the Office of Management and Budget has found that federal agencies have cut close to $20 billion in contracting costs. In March 2009, President Obama instructed federal agencies to cut around $40 billion from contracting budgets over the next two years.

Federal agencies have cut $19 billion through cutting down non-competitive contracts and in-sourcing some jobs. Under the plan, many federal agencies will experience a five percent growth in the number of employees dealing with contract management and purchasing.

In 2008, government spending on contracts was around $540 billion according to the OMB. The Obama administration has instructed agencies to cut noncompetitive contracts by a minimum of ten percent.

The National Nuclear Security Administration was highlighted in the report as having saved around 18 percent per contract through the use of a ‘reverse EBay’, that allows contractors to resubmit bids if a competitor offers a lower bid.

However, the  list of ‘inherently governmental functions’ that OMB is supposed to compile is not included in the report. The list will serve as a guideline for government contractors as to which services or tasks they should no longer provide to the federal government.

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