On March 4, President Obama signed a Presidential Memorandum designed to reform government contracting, strengthen oversight and manage taxpayer dollars. The proposal would end no-bid and cost-plus contracts, maximize the use of competitive procurement processes and clarify the rules prescribing when outsourcing is and is not appropriate. The reform is projected to save taxpayers up to $40 billion a year.
The memorandum tasks the Federal Acquisition Reform (FAR) Council to develop and issue by July 1, 2009, government-wide guidance to assist agencies in reviewing contracts, and create processes for ongoing review of existing contracts in order to identify those that are "wasteful, inefficient, or not otherwise likely to meet the agency's needs." The guidance will also formulate appropriate corrective action in a timely manner. The memorandum also mentions taking corrective action, such as modifying or canceling contracts that are deemed to meet that criteria.
The Office of Management and Budget (OMB) is also directed to develop and issue by September 30, 2009, government-wide guidance to:
- govern the appropriate use and oversight of sole-source and other types of noncompetitive contracts and to maximize the use of full and open competition and other competitive procurement processes;
- govern the appropriate use and oversight of all contract types, in full consideration of the agency's needs, and to minimize risk and maximize the value of government contracts generally, consistent with the regulations to be promulgated pursuant to section 864 of Public Law 110-417;
- assist agencies in assessing the capacity and ability of the Federal acquisition workforce to develop, manage, and oversee acquisitions appropriately; and
- clarify when governmental outsourcing for services is and is not appropriate, consistent with section 321 of Public Law 110-417 (31 U.S.C. 501 note).