Obama administration targeting ineffective contracts in an effort to trim costs
The Obama administration said Monday that it plans to review 26 government information-technology projects worth a total of $30 billion as part of an effort to trim back or cancel contracts that aren't meeting goals.
Among the contracts singled out for scrutiny were a $1.5 billion project for Lockheed Martin to update air traffic control equipment; a $281 million award to Computer Sciences Corp. to help process patent applications; and a $350 million project for AT&T to improve the Treasury Department's telecommunications.
Before leaving office last month, former White House budget director Peter Orszag ordered a review of the $80 billion the government spends annually on technology to determine whether lax oversight has led to cost overruns, delays and the implementation of obsolete systems.
"We need to end a culture in Washington where we continue to throw good money after bad money," said Vivek Kundra, the government's chief information officer, on a conference call Monday. "If these projects can't be turned around, if they don't add value, we will take the appropriate actions. They may be discontinued."
The projects cited range from $64.5 million awarded by the Commerce Department for an information system to $7.6 billion for an Interior Department system.
IBM's portion of a $4.5 billion cargo-tracking system for the Department of Homeland Security was identified for review, as was Raytheon's $251 million contract for the patent-processing project.
The White House worked with federal agencies to determine which projects should be included on the "high priority" list in an effort to make them more efficient, Kundra said. He cited a Department of Veterans Affairs project that got under way in 1998 at a cost of $250 million, was halted in 2004, restarted in 2005 and stopped again "after spending millions of dollars."
Kundra wouldn't say when a decision would be made on projects that may be canceled.
AT&T spokesman Michael Balmoris declined to comment. Lockheed Martin spokesman Jeffery Adams, Computer Sciences Corp. spokeswoman Marian Herbst Kelly, IBM spokesman Clint Roswell, and Raytheon spokesman Jon Kasle all said they couldn't immediately comment.
The initiative is part of a larger effort by the Obama administration to pare the budget deficit, which the White House projects to be a record $1.5 trillion this year, or about 10 percent of the U.S. gross domestic product. Obama has ordered a three-year freeze in non-defense and national security programs in his budget released Feb. 1. He has also ordered some agencies to reduce their 2012 budget requests by 5 percent.
-- Bloomberg News