Obama Charges Administrators to Reform Contracting

President Barack Obama on Wednesday ordered a much-needed look at and reform of the processes surrounding government contracting and procurement. This is to include virtually all agencies and branches of the federal government, including the Department of Defense, usually exempted from such measures. The following quote is from President Obama via the White House executive memorandum:

“I hereby direct the Director of the Office of Management and Budget (OMB)… and the heads of such other agencies as the Director of OMB determines to be appropriate… to develop and issue by July 1, 2009, Government-wide guidance to assist agencies in reviewing, and creating processes for ongoing review of, existing contracts in order to identify contracts that are wasteful, inefficient, or not otherwise likely to meet the agency’s needs, and to formulate appropriate corrective action in a timely manner. Such corrective action may include modifying or canceling such contracts…”

What does this mean for the small business owner?

Well, that depends. If you have a long-term contract currently in place, immediately make sure that your processes are well documented and defensible. Excess waste should be cut out proactively and inefficiencies need to be addressed – nobody wants a contract canceled so be sure to take a look at what you can do to prevent it.

On the other hand, for companies looking to break into contracting, this is potentially a tremendous opportunity. As of July 1, 2009, existing long-term contracts will begin to be reviewed. Many incumbent contractors could be hoisted out of their positions, which means that many contracts will have to be refilled. Over the coming year many businesses will be tapped to replace the companies who have their contracts cancelled, so now is a great time to start positioning your business to take their place!

Obama also said he wants to “open up the bidding for contracts to small businesses,” which will help drive even more potential growth to the small business owner!