The Office of Management and Budget is directing federal agencies to streamline procurement, including a 7% cut in spending on contracts by the end of fiscal 2011. OMB also wants agencies to reduce their non-competitive and high-risk contracts by 10% by 2010. OMB Deputy Director for Management Jeffrey Zients told a Senate panel on Oct. 28 that the changes could save $40 billion annually.
The market is generally healthy and steadily growing, and margins are up for large specialty contractors. Further, advances in design tools and owner demand for collaboration are giving subcontractors a seat at the table early on in projects.