Checking in on contractor waste | Citizens Against Government Waste
The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Checking in on contractor waste

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact

In March of 2009, President Obama delivered a speech on procurement at the Eisenhower Executive Office Building in which he excoriated the outgoing administration for its irresponsible spending on government contracts.  The President explained that "Over the last eight years, government spending on contracts has doubled to over half a trillion dollars," adding that "the spending is plagued by massive cost overruns, outright fraud, and the absence of oversight and accountability," and called no-bid contracts "wasteful" and "inefficient." Most promising of all, President Obama declared that the federal government had been "spending money on things that we don't need ... paying more than we need to pay."  As the organization that helped expose the Defense Department's $640 toilet seat and $436 hammer, we at CAGW found such rhetoric very encouraging. Of course, it's easy (and common) for presidents to pay lip service to lofty concepts like cost savings, transparency, and competition in government contracting.  But President Obama went further than that.  He laid out a concrete savings goal that his administration would aim to achieve.  Later in the same speech the President announced that his plans for reform in "how government does business" would "save the American people up to $40 billion each year."  In the last four years, President Obama's choice of the words "up to" have proven important, for the savings have almost entirely failed to materialize, and the lack of competition he promised to correct has instead gotten worse. On Monday, the Washington Post reported that the cost of no-bid contracts awarded by federal agencies rose from 105.8 billion in FY 2009 to $115.2 billion in FY 2012, an increase of 9 percent.  The share of federal contract spending that has gone through non-competitive orders (no-bid contracts) has also risen, from 20 percent in 2009 to 23 percent in 2012.  Overall spending on government contracts has decreased 5 percent, a savings of roughly $27 billion.  That number certainly beats the alternative increased contract spending, but remains a very far cry from the President's "$40 billion each year."  Put another way, the President has missed his goal by about $133 billion, which is enough to make one wonder why he didn't promise even higher savings. Despite the rise in no-bid contracts, the Post credits Joe Jordan, head of the Office of Federal Procurement Policy, with the following quote:

While there is more work to be done, agency efforts have produced good results in our efforts to increase the use of competition

The President promised more competition, and the result has been more no-bid contracts at a higher cost to taxpayers.  These are "good results"?  What would bad results look like?  Perhaps we will find out over the next four years.

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