Robert Brodsky over at Government Executive brings news that the federal government, for the first time in 13 years, spent less on the procurement of private sector goods and services than it did the previous year. Dropping $15 billion below the fiscal year (FY) 2009 levels of $550 billion, the Obama administration says it is on target to meet the president's goal of reducing contract spending seven percent through FY 2011.

The administration seems to be reaping the benefits of its push to reform information technology (IT) procurement, as much of the savings stemmed from IT procurement reductions or project cancelations.

The GovExec piece points out several examples:

[T]he Veterans Affairs Department has reduced its purchases of new information technology systems while the Justice Department eliminated an expensive case management system. The Housing and Urban Development Department, meanwhile, saved $44 million by eliminating a financial management system.

Several other agencies have benefited from other reforms too, including the consolidation of "purchases through strategic sourcing," the introduction of "enhanced competition," and improved "contract management oversight," according to Office of Federal Procurement Policy (OFPP) Director Dan Gordon.

Not credited with any of the cost savings is the administration's in-sourcing initiative. GovExec quotes Gordon insisting, "We don't view [in-sourcing] as a cost saving imitative. We view it as a cost management initiative." That's government-speak for claiming the imitative is a long-term investment versus a short-term cost saver.

Interestingly, though agencies met their goal to reduce overall contract spending, as a whole they did not reduce spending in several high-risk categories by enough, including the dastardly sole-source, cost-reimbursement, and time-and-material contracts.

If the federal government can continue to reduce contract spending through efficiencies and reforms, it will really lay the base for continued cost savings down the line, especially when you add in the benefits of in-sourcing.

Image by Flickr user johnsolid used under a Creative Commons license.