Wednesday, March 04, 2009

Obama Set to Attack “wasteful spending” by Government Contractors - Ignoring Waste in Government Agencies

In an article today from the Associated Press : President Obama is planning to address the issue of contractors, and ways that he feels tens of billions of taxpayer dollars could be saved by taking a different approach. Specifically cited in the article is the President’s fleet of Marine One Helicopters, which have gone “over budget”. Although, it goes without saying that outside contracts can often be pricey to the taxpayer, in reality contractors save the government money in the long run. How so? It has to do with the budget structure currently in place within the Federal government and the way in which government contracts are handled.
In the simplest of terms: When the government outsources a specific job, contractors bid in order to be considered, and in many cases, underbid in order to get the contract. When a contract is underbid, every penny is counted, and some working for contractors must act more like MacGyver, in order to meet federal standards and keep a job both safe and on time.

On the flip side, should a government agency, with a budget of 10 million dollars, find towards the end of the budget year, that they have spent only 8 of that 10 million, ways must be found to spend the rest and quickly, otherwise, the following year’s budget might be reduced or possibly eliminated. Therefore, $15 dollar hammers, and yearly office renovations are not uncommon. It might behoove some President and Congress at some point, in the not too distant future, to treat government agencies in much the same way as it treats these much maligned contractors. Case in point: if an agency comes in under budget, those funds would then be returned to the taxpayer in a reduction of the deficit, those working for the agency, would be rewarded in some way for being fiscally astute, and instead of being penalized, given the exact same budget (or one adjusted for inflation) the falling year. That would save a lot more than 10’s of billions.

That said, it would be out-of-character to actually make changes to what is broken in Washington when it comes to spending as usual, (within a specific party particularly). Expect the rhetoric against “contractors” (sic. The evil Halliburton) to continue, and the fact that the true waste is coming from within our own agencies, to go completely unreported. Unless of course, real "hope" and "change" ever appears in Washigton.

1 comment:

Chuck said...

Saw this article earlier, I had to read the title twice, I thought I must be misunderstanding it.

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