Just in time for the federal government's annual burst of contract awards in the final quarter of the fiscal year, the White House has directed all executive branch agencies to establish long-range contracting plan sdesigned to avoid the widely deplored phenomenon known as "hurry-up spending."
Fulfilling a promise the Carter administration made to Congress last summer, the Office of Federal Procurement Policy told the agencies to rewrite their procurement regulations so that top officials will not be able to sign year-end contracts unless the purchases wre specified in an Advance Procurement Planning (AFP) established at the start of the year.
The new policy also requires closer auditing of certain contracts deemed to have a "high waste vulnerability," particularly consulting contracts, where it is not always clear whether the government is getting its money's worth.
The new policy, set forth in the OFPP's Policy Letter 81-1, is OMB's response to continuing congressinal criticism of the departments' tendency to spend disproportionate amounts of their annual budgets near the end of the budget year. Critics say agencies do this to make sure that none of their budgeted funds are left over at year's end, a result that might prompt Congress to reduce future budgets.
To cite one of many examples, the National Highway Traffic ysafety Administration in fiscal year 1979 spent three times as much money in the last month as in any other month, according to figures compiled by the Senate Investigations Committee, chaired by Sen. William S. Cohen (R-Maine).
Cohen and other members of Congress agreed last yearnot to push legislatin on the subject after the procurement policy office promised to issue guidelines. The Winner?
Critics of federal contracting practice cite scores of examples of "hurry-up spending," but there is general agreement on the all-time champion: On the last business day of fiscal year 1979, the Interior Department awarded a $145,000 consulting contract for a plan to help the department avoid year-end spending.