Streamlining Government: Opportunities Exist to Strengthen OMB's Approach to Improving Efficiency Page: 50 of 73
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Spend analysis is an important component of the administration's plans to
improve government procurement. Along these lines, OMB issued
memoranda in July and October of 2009 instructing agencies to increase
competition for new contracts.81 The administration also set a net savings
target of $40 billion to be achieved by agencies through improved
contracting practices in fiscal year 2010 and 2011. The October
memorandum provided agencies guidelines for increasing competition for
contracts and structuring contracts to achieve the best results at the least
cost to the taxpayer. Specifically, the memorandum recommends the use
of spend analysis to identify the agency's largest spending categories,
analyze and compare levels of competition achieved by different
organizations within the agency, determine if more successful practices
may exist for obtaining greater marketplace competition for a given
Among the programs we reviewed, officials from the Job Corps program
reported that they achieved improvements in efficiency by using some
elements of a strategic spending approach. For example, Job Corps
officials indicated that the program has avoided approximately $1 million
in utility costs by purchasing energy from utilities using competitive bids
in deregulated markets. When an area of the country became deregulated,
the program would analyze the utility prices and quantities of electricity or
natural gas used by the Job Corps centers in the area. If prices in the
deregulated market looked favorable, the energy contracts for the centers
would be placed out for bid to all eligible energy suppliers. Job Corps
would select the bid with the best price and terms and set up a contract to
purchase energy from them for a fixed period of time (usually 1 or
2 years). When the contracts came to an end, the process would be
repeated. If the prices on the deregulated market were not favorable at
that time, then the centers could revert back to the local utilities for their
energy. Job Corps also conducted energy audits to identify problem areas
and propose solutions to reduce energy costs at facilities where energy
usage was above the benchmark. Job Corps reportedly reduced energy
costs through investments in energy saving projects, training of staff and
81Memorandum from Peter R. Orszag, Director, OMB, for the Heads of Departments and
Agencies, Subject: Improving Government Acquisition (July 29, 2009). Memorandum from
Lesley A. Field, Deputy Administrator, OMB, for Chief Acquisition Officers, Senior
Procurement Executives, Subject: Increasing Competition and Structuring Contracts for
the Best Results (Oct. 27, 2009).
GAO-10-394 Streamlining Government
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United States. Government Accountability Office. Streamlining Government: Opportunities Exist to Strengthen OMB's Approach to Improving Efficiency, report, May 7, 2010; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc302236/m1/50/: accessed May 22, 2019), University of North Texas Libraries, Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.