Federal Contract Spending down by $15 Billion

White House Emphasizes “Buying Less and Buying Smarter”

SOURCE: Flickr/The Aspen Institute

The TechStat reform project, led by Chief Information Officer Vivek Kundra, pictured above, has helped cut contracting costs through the cancellation of several major information technology systems.

By Pratap Chatterjee | February 3, 2011

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The White House declared today it had cut spending on contracting from $550 billion in fiscal year 2009 to $535 billion in the last fiscal year. Much of this came from “buying less and buying smarter” as the Center for American Progress advised in a report last year.

“We are focusing on what we need. No more bells and whistles,” said Daniel Gordon, administrator of the Office of Federal Procurement Policy. “We are also holding contractors’ feet to the fire to make sure they deliver value to the American taxpayer,” he added.

The amount of taxpayer dollars spent on contracting has risen steadily since 1997 and was projected to hit $615 billion this past year. Gordon pointed to the government’s negotiation of volume licensing for software to cut costs, as well as the cancellation of several major information technology systems via the TechStat reform project led by Chief Information Officer Vivek Kundra.

Gordon also attributed cost saving to the use of the Federal Awardee Performance and Integrity Information System, or FAPIIS, a newly created database that allows contracting officers to check up on disqualified contractors as well as those who have employed “defective pricing” or have incurred other adverse administrative judgments.

In the future, the White House will seek to reduce spending on technical and professional services, spend more time in dialogue with industry to buy smarter, and increase purchasing from small businesses. “Our goal is to make sure that every dollar is well spent, not to make arbitrary cuts,” added Jeff Zients, deputy director of the Office of Management and Budget.

Pratap Chatterjee is a Visiting Fellow at the Center for American Progress.