May 7, 2009

White House officials today proposed cutting the number of contract workers at the Defense Department and collecting delinquent taxes from federal contractors more quickly as part of a plan to save $17 billion next year.

The Obama administration said it intends to save $900 million in fiscal 2010 by decreasing DOD's use of contracted support service personnel and bringing many of those jobs in-house for federal employees to perform, according to a budget document.

Under the plan, the DOD contractor workforce would drop to a pre-2001 level of 26 percent of the total defense workforce, down from the current 39 percent. DOD “expects to achieve savings by replacing selected contractors with 33,500 federal civilians by 2015,” the report states.

The administration also said it will change procedures so the Treasury Department can more quickly collect unpaid taxes from federal contractors, for a total of $2 billion in 10 years. In 2007, the Government Accountability Office reported that about 60,000 federal contractors were delinquent on $7.1 billion in federal taxes.

The plans are part of 121 proposals from the administration to save $17 billion next year by trimming and eliminating programs.

“The administration identifies programs that do not accomplish the goals set for them, do not do so efficiently, or do a job already done by another initiative — and recommends these programs for either termination or reduction,” the report states.

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