The Obama administration’s design to cut down “wasteful” spending is lurching toward reality.
In a bid to curb wasteful spending, Undersecretary of Defense for Acquisition Ashton Carter is making good on Secretary of Defense Robert Gates’ call to tighten the defense spending budget, while President Barack Obama’s budget and technology braintrust has put at least a temporary halt to $3 billion worth of tech spending pending a review.
Carter is scheduled to meet today with defense industry reps and lobbyists to discuss ways the firms could slice wasteful spending – but the acquisition specialist will reportedly call into question the structuring of overhead costs and profits on different types of contracts.
According to the New York Times, Carter has declined to comment in advance of the meeting.
Obama’s senior staff is also putting a hold on $3 billion in IT contracts and reviewing $10 billion worth of other projects.
Among the companies mentioned by OMB Controller Danny Werfel to be up for the broader review were Accenture, IBM, Oracle and SAP AG, according to Reuters. Werfel noted that none of those firms were slated to be subject to special scrutiny.
White House Budget Director Peter Orszag is looking into the role lax oversight has played in cost overruns, delays and the implementation of obsolete systems.
“For the most part we don’t get a good return on that $80 billion (in IT spending),” said Jeffrey Zients, Obama’s chief performance officer, according to Reuters. “We need to become better, smarter customers.”
Obama is trying to prune budget deficit, projected to top $1.55 trillion in 2010.
Federal CIO Vivek Kundra pointed to the Department of Defense’s effort to consolidate payroll and personnel records as and example of wasted IT dollars. The project dragged on for 10 years with a $1 billion price tag, before being struck down this year after Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff, called it a “disaster.” Kundra pointed out that $27 billion in IT projects are currently either over budget or behind schedule.
“This is what we’re facing in terms of some of the structural, systemic problems,” Kundra said.
“We need to do more, in effect, with less money,” Zients said. “And technology is the primary enabler of doing more with less.”