Obama Reverses Growth of No-Bid Contracts
Policy + Politics

Obama Reverses Growth of No-Bid Contracts

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The White House budget office, as part of a larger campaign to clean up government contracting, said Wednesday it has begun to reverse the explosive growth in costly no-bid contracts.

The Office of Management and Budget said that the dollar value of no-bid contracts was 10 percent lower in the first six months of  this fiscal year, compared to the first half of 2009.  As a result, the White House predicted, the Obama administration is on track to meet its goal of saving $19 billion this fiscal year through better procurement practices.

Critics have complained for years that no-bid contracts cost taxpayers much more than contracts awarded through competitive bidding, but their number and cost more than doubled from $73 billion in fiscal 2000 to $173 billion in fiscal 2008.   On top of that, the value of contracts that received only one bid more than quadrupled from $14 billion in 2000 to $67 billion in 2008. 

“Our goal is for every agency to reduce the share of dollars obligated through these types of contracts this fiscal year by 10 percent, and I am happy to report that we are making significant progress toward this goal,’’ Peter R. Orszag, the White House budget director, wrote in his blog on Wednesday. 

Last month, OMB officials began a separate crackdown on big information-technology contracts that are running over budget.  In an order last Monday, Orzsag and White House Chief of Staff Rahm Emanuel instructed government agencies to freeze 30 big modernization projects worth about $20 billion while OMB  officials review plans to make them more focused. 

“By setting the scope of projects too broadly rather than focusing on essential business needs, federal agencies are incurring substantial cost overruns and lengthy delays,” Orszag wrote on June 28.   In addition, the White House said it had begun detailed reviews of what it called the “highest risk’’ projects that are either behind schedule or over budget.

The Washington Post reported that one of those contracts is a financial and logistics system being developed for the Department of Veterans Affairs.