Presidential Directive on Government Contracting

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Presidential Directive on Government Contracting: The presidential directive in 2009 was geared towards reforming the way in which the government acquires goods and services. The directive provided major federal contracting reforms to an extent that executive agencies could expect more accountability and completion in procurement activities of the federal government. The main reason behind the directive was the need for the federal government to take appropriate measures to lessen wasteful spending, fraud, and overcharges. Some of the key steps to be undertaken by the government to reform procurement activities include limiting the use of non-competitive and cost-reimbursement contracts, enhancing acquisition workforce quality, and lessening outsourcing of inherent government functions. The other steps are executing proposals by the Government Accountability Office on how to decrease overpayments and cost overruns and to review the specified high-risk acquisition programs (Moorhouse & Connolly, 2009). President Obama’s directive to lessen the use of cost-reimbursement contracts was based on the increasing preference for competitive fixed-price contracts. This preference was brought by the realization that cost-reimbursement contracting had increased significantly from $71 billion to $135 billion in less than a decade. Therefore, the president wanted to restrict cost-reimbursement contracts in order to lessen spending in government contracting initiatives. This would in turn increase the use of competitive fixed-price contracts while permitting the use of cost-reimbursement contracts only in situations that do not allow the agency to adequately describe its requirements. The preference for a Firm Fixed type contract is influenced by various factors other than the huge costs associated with other types of contracts. One of the major factors contributing to this preference is the significant increase in federal obligations in other types of contracts. This increase is coupled with the lack of a clear and complete picture of the use of cost-reimbursement contracts by the federal government. Actually, a considerable increase in federal obligations has been reported for contracts involving the use of combination strategies. Secondly, the government seems to prefer Firm Fixed type contract because of the recent decision to remove the use of combination strategies. This decision was made as part of initiatives to enhance the effectiveness of all new contract awards from the beginning of the 2010 financial year (“Extent of Federal Spending”, 2009). Third, preference for a Firm Fixed type contract was brought by the difficulties in determining rationales for using other types of contracts.

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