Last week, President Barack Obama released his fiscal year 2012 (FY2012) budget. His proposed $3.7 trillion budget would reduce the deficit by $1 trillion over 10 years. The proposal presents a 2.7 percent decrease in overall spending from President Obama's FY2011 budget. Republicans immediately blasted the President's proposal, saying it contained entirely too much spending during a time when the deficit is at a record high. Democrats have been slow to warm up to the proposal, as many believe it raises many of questions as to the priorities of the Administration.

President Obama’s FY2012 budget has significant acquisition-related recommendations. For instance:

  • The President seeks to terminate the Department of Defense (DoD) C-17 transport aircraft, Marine Corps Expeditionary Fighting Vehicle, and the alternate engine for the Joint Strike Fighter programs. The budget also aims at implementing a number of additional cost savings management and acquisition reforms, such as reducing its use of time-and-material and labor-hour contracts.
  • With respect to the Department of Homeland Security (DHS), the President proposes to redirect over $400 million from consulting and professional service contracts to high-priority initiatives, such as aviation screening technology.
  • The President proposes over $2 billion in savings resulting from a reduction in administrative expenses across civilian agencies, including professional and technical services and supplies. To the extent such services and supplies are necessary, agencies are encouraged to buy less, pay lower rates, and acquire such products and services in a fixed-price manner.

Notwithstanding the acquisition cut-backs, the Administration intends to increase the size of the federal workforce by approximately 15,000 employees, including 8,000 jobs at DHS and 5,000 jobs at the Treasury. This may further demonstrate that the Administration’s insourcing effort has not been derailed and will continue into FY2012.