Obama takes aim at costly defense contracts

By Ross Colvin
Wed Mar 4, 6:20 pm ET
WASHINGTON (Reuters) – President Barack Obama said on Wednesday the U.S. government was paying too much for things it did not need and ordered a crackdown on spending "plagued by massive cost overruns and outright fraud."
The Democrat, under fire from Republicans for the $3.5 trillion price tag for his 2010 budget plan, also took aim at predecessor George W. Bush and noted the cost of government contracts had doubled to more than half a trillion dollars over the past eight years.
Obama, who inherited a $1.3 trillion budget deficit when he took office on January 20, said wasteful spending was a problem across the government, but he zeroed in on the defense industry and costly weapons projects hit by "delay after delay."
"The days of giving defense contractors a blank check are over," Obama told reporters in a briefing on his reforms.
He has singled out the ballooning costs of a Lockheed Martin Corp project to build a new presidential helicopter fleet as an example of the procurement process "gone amok."
Defense companies, however, bristled at Obama's suggestion they had been running wild with taxpayers' money and insisted there had always been oversight and accountability.
Obama said he was ordering a reform of the way the government did business, a move he said would save taxpayers $40 billion a year and help cut the budget deficit, which he has forecast will hit $1.75 trillion for the 2009 fiscal year.
"We will stop outsourcing services that should be performed by the government and open up the contracting process to small business. We will end unnecessary no-bid and cost-plus contracts," he said.
Critics say cost-plus contracts invite abuse because they allow companies to charge the government costs plus a fixed profit, no matter how poor their performance.
Obama has tried to show his determination to apply fiscal discipline even as he ratchets up government spending he says is vital to tackle the worst economic crisis in decades.
Republicans, including his opponent in the election, Senator John McCain, support procurement reform but say his budget proposal is part of a "tax-and-spend" onslaught.



I personally rooted for mcCain, but Obama has made some good decisions even though he continues to be attacked by Republicans and the press. If I were president I would love to have a new helicopter fleet. But Obama made the right choice and voiced his opinion that this was an example of how defense contractors have been given too much money.
According to President Obama, Bush practically gave these defense contractors blank checks throughout his administration, therefore leading to the $1.3 trillion budget deficit. Hopefully Obama can come through with his plan and save the country $40 billion a year.
This move by Obama also shows that he is on the side of the small businesses, believing that it is up to the the government and the help of "small contractors." I believe that the president should stay unbiased when it comes to this, but when large companies start contributing to large debts, then it is time for change.