Obama vows to cut contracts by 10 percent

The presidential candidates have gotten in a bidding war over promises to trim federal fat, with both using the issue to try to portray themselves as the one to shake up Washington at a time when voters are disgusted with government.

Sen. Barack Obama announced Monday that he would cut federal spending on contractors by “at least 10 percent" — an effort to move in on his rival's signature issue of budget earmarks.


“Barack Obama will reform federal contracting and reduce the number of contractors, saving $40 billion a year,” says his 11-page “Plan to Reform the Greed and Excesses of Washington.”

The plan, which he was unveiling at midday in Green Bay, Wis., also says Obama "will require each federal agency to defend each of its noncompetitive contracts to the Office of Management and Budget.”

It sounds like a brochure for Sen. John McCain (R-Ariz.), but it’s the headline of Obama’s plan: “STOP WASTEFUL SPENDING AND CURB INFLUENCE OF SPECIAL INTERESTS SO GOVERNMENT CAN TACKLE OUR GREAT CHALLENGES.”

Other new proposals in the blueprint:

— Expose Corporate Welfare and Special Interest Tax Breaks to Public Scrutiny: Barack Obama will shine a light on corporate welfare by creating an agency charged with identifying recipients of corporate subsidies and evaluating the effectiveness of these subsidies in promoting growth and opportunity. The agency will help identify wasteful subsidies that should be eliminated, and help prevent new corporate welfare initiatives from being passed. Obama will ensure that any tax breaks for corporate recipients — or tax earmarks — are also publicly available by directing the Office of Management and Budget to post them on its website in an easily searchable format.

As president, Barack Obama will restore the American people’s trust in their government by making government more open and transparent. Obama will work to reform congressional rules to require all legislative sessions, including committee mark-ups and conference committees, to be conducted in public. By making these practices public, the American people will be able to hold their leaders accountable for wasteful spending and lawmakers won’t be able to slip favors for lobbyists into bills at the last minute.

— Enforce Executive Branch Ethics: Today the Office of Governmental Ethics (OGE) is only an advisory agency with no enforcement authority. Ethics decisions are made by roughly 4,000 individual ethics officers appointed by the head of each executive branch agency. These officers rarely have any ethics training and routinely reject the advice given by OGE. An Obama administration will give his OGE strong enforcement authority with the ability to make binding regulations, and it will work with inspectors general in all the federal agencies to enforce ethics rules, minimize waste and ensure federal officials are not using their offices for personal gain. The OGE will also be the clearinghouse of all public records relevant to ethics in the Executive Branch and place this information on its website, including records of waivers from conflicts-of-interest that are requested and granted, personal financial statements of appointees and the career histories of senior executive branch staff who enter and leave public service. Finally, the OGE will promulgate rules and procedures to record all oral and in-person “lobbying contacts” between registered lobbyists and political appointees and make those records available to the public in a searchable computerized database.

— Not Just Measure Performance, but Enforce Standards: Barack Obama will fundamentally reconfigure PART. He will open up the insular performance measurement process to the public, Congress and outside experts. Obama will eliminate ideological performance goals and replace them with goals Americans care about and that are based on congressional intent and feedback from the people served by government programs. Obama will also ensure that programs are not only measured in isolation, but are assessed in the context of other programs that are serving the same population or meeting the same goals. For instance, a veteran may be getting health care from a Department of Veterans Affairs (VA) hospital, disability benefits from a different federal office, other benefits from state programs and local food aid. Obama’s performance improvement effort will include cross-agency performance where service delivery requires coordination across federal agencies and multiple levels of government.

— Implement Consequences for Success and Failure: The president needs the flexibility to enforce standards when programs continually fail. Barack Obama will work with Congress to enable the president to take steps like sending in performance teams to reform programs; replacing existing management; demanding improvement action plans; and cutting program budgets or eliminating programs entirely. Obama will also experiment with giving government managers the ability to work with their teams to establish goals and to give bonuses when those goals are met. These steps will be guided by performance measures and will be transparent and visible to the public and Congress.

— Move Workers from Bloated Bureaucracies to the Frontlines: In many areas of the federal government there is too much Washington bureaucracy — too many layers of managers, and too much paperwork that does not contribute directly to improving the lives of the American people. At the same time, there are too few workers on the front lines in local offices across the country. We need more resources and better tools for food inspectors at the Food and Drug Administration, for nurses at VA hospitals, for air traffic controllers and baggage screeners, and for immigration border control agents. Barack Obama will thin the ranks of Washington middle managers, freeing up resources both for deficit reduction and for increasing the number of frontline workers.

— Eliminate Wasteful Redundancy: Too often, federal departments take on functions or services that are already being done or could be done elsewhere within the federal government more effectively. The result is unnecessary redundancy and the inability of the government to benefit from economies of scale and integrated, streamlined operations. Obama will conduct an immediate and periodic public inventory of administrative offices and functions and require agency leaders to work together to root out redundancy. Where consolidation is not the right strategy to improve efficiency, Obama will improve information sharing and use of common assets to minimize wasteful duplication.

— Protect Whistleblowers: Often the best source of information about waste, fraud, and abuse in government is an existing government employee committed to public integrity and willing to speak out. Such acts of courage and patriotism, which can sometimes save lives and often save taxpayer dollars, should be encouraged rather than stifled as they have been during the Bush administration. We need to empower federal employees as watchdogs of wrongdoing and partners in performance. Barack Obama will strengthen whistleblower laws to protect federal workers who expose waste, fraud, and abuse of authority in government. Obama will ensure that federal agencies expedite the process for reviewing whistleblower claims and whistleblowers have full access to courts and due process.

— Increase Use of Technology: Meeting 21st Century challenges will require a government that leverages 21st Century technologies and keeps up with the private sector. Obama will appoint the nation’s first Chief Technology Officer (CTO) to ensure that our government and all its agencies have the right infrastructure, policies and services for the 21st century. The CTO will work with each of the federal agencies, to ensure that they use best-in-class technologies and share best practices. Like he has in the campaign, Obama will employ innovative technologies, including blogs, wikis, social networking tools and other new strategies, to modernize internal, cross-agency, and public communication and information sharing.

— Sunlight on Corporate Tax Loopholes: The tax code is riddled with corporate loopholes and preferential regulations that benefit a handful of companies at the expense of the rest of the business community as well as ordinary families. Some large companies have managed to secure tax breaks or to hide their profits in overseas tax havens to not pay any American corporate taxes at all. Barack Obama will require any tax bill considered by Congress to include a Corporate Tax Impact Statement that would disclose which industries or specific companies would be expected to benefit from the new tax breaks.

— Restore Management and Oversight Capacity: The federal government’s ability to manage contracts has not kept up with the increase in the volume and complexity of federal contracts. Barack Obama will hire more contract managers and improve training. He also will ensure that contract oversight remains within the federal government so that a contract’s oversight is not outsourced to a business partner of the company doing the contract’s work. Such an arrangement contributed to wasteful spending in the Coast Guard’s $24 billion Deepwater contract and the Department of Homeland Security’s $30 billion border security contract with Boeing. Obama will also require audits of a quarter of large contracts each year, focusing in the first year on noncompetitive and cost-plus contracts. The audit will verify performance and cost savings, as well as whether the work was appropriate for contracting out, the competition was done fairly, and the contractor treated its workers appropriately.

In addition, cost-plus contracts have increased more than 75 percent under the Bush administration. These contracts are vulnerable to waste because they provide no incentive to control costs. Obama will encourage the use of fixed-cost or incentive-based contracts and when cost-plus contracts are necessary, force agencies to use mitigating procedures like incentives tied to performance goals and cost savings.

— Federal Contracts for Tax Delinquent Companies: In numerous studies, GAO has found that tens of thousands of federal contractors have tax debts totaling billions of dollars. Barack Obama will build upon his work in the Senate to prohibit seriously delinquent contractors from getting contracts for government work.