Obama Promises Reforms, Reductions in Federal Contracting Democratic presidential candidate Barack Obama is pledging to cut federal contract spending by 10% and reform contracting procedures. In a policy paper released Sept. 22, Obama said he will sharply curtail the use of cost-plus contracts. “These contracts are vulnerable to waste because they provide no incentive to control costs,” the paper says. Obama said he will encourage fixed-cost or incentive-based contracts. “Moreover, federal agencies are increasingly seeking to contract out functions that should be done by the government,” the paper says. “The privatization of IRS collection functions, military training and the administration of the GI Bill for veterans are examples of this.” The Illinois senator also promised to hire more contract managers and improve their training. “The federal government’s ability to manage contracts has not kept up with the increase in the volume and complexity of federal contracts,” his paper said. Obama said he will appoint a chief performance officer, who will assemble “SWAT teams” to assess the effectiveness of federal programs and abolish those that are not performing well. In a Sept. 22 speech in Green Bay, WI, he said his administration will “go through the entire federal budget, page by page, line by line” and “eliminate the programs that don’t work and aren’t needed.” Republican presidential nominee John McCain has also called for limits on the use of sole-source and fixed-price contracts to “enforce discipline in the procurement process and ensure that clearly defined requirements are fulfilled, realistic schedules are kept and costs don’t exceed the promised price.”