Uncle Sam’s Efficiency Push: Boon or Bane?
In the 14-trillion-dollar debt's “new normal,” some see government cost-trimming helping company contracting. Others see related regulations just creating more trouble.
Last month President Obama issued an Executive Order titled “Delivering an Efficient, Effective and Accountable Government.” In it, the President promised to cut waste and streamline government operations. Among the steps identified to achieve these goals: deploying fraud detection tools, leveraging the government’s purchasing power, reducing high-risk contracting practices, and identifying alternatives to the use of consultants.
Clearly, taxpayers benefit when government is run as efficiently as possible. That’s especially true given the $14.3 trillion national debt. “Budgets have been tight in the past,” says Janet Hale, director with Deloitte Consulting LLP and former undersecretary for management with the Department of Health and Human Services. “But, this is a new normal.”
Issuing an Executive Order is a “terrific first step,” Hale says. However, gaining efficiency is a complex journey, she adds. Federal agencies need to “set up the right structure, and get the right people and performance metrics,” in place, she adds. “It’s a complex journey.”
‘Too Little, Too Late’
Margot Dorfman, chief executive officer with the U.S. Women’s Chamber of Commerce, is less sanguine about the move. “It’s a little too little, a little too late,” she says. One particular area of concern is ensuring that smaller- and women-owned businesses have reasonable access to government contracts. Currently, many smaller contracts are bundled into larger ones, which put them out of reach of smaller companies, and reduce the number of potential bidders, Dorfman says.
According to a 2010 report by the Government Accountability Office, 44% of government contracts either were noncompetitive, or received only one offer. Given that the value of government contracts awarded in 2010 totaled $537 billion, and topped $4.5 trillion from 2000 through 2010, according to USASpending.gov, the potential for overspending is huge. “When you’ve got less competition, you’re not going to get the best bang for your buck,” Dorfman says.
Another area of concern, not surprisingly, is regulation. According to the U.S. Chamber, Federal agencies currently are implementing 500-plus required or suggested rules as a result of from Dodd-Frank Act, and 159 new agencies, commissions and other groups are being established as a result of the new health-care reform law. To counter this, the Chamber has initiated a “Project on Regulatory Reform.” Among its goals: obtaining independent evaluations of the economic and employment impact of major rules, as well as a periodic review of current regulations in order to sunset those found to be ineffective or unnecessary.