Obama: Days of ‘blank check’ for defense contractors over

President Obama on Wednesday outlined a plan to save up to $40 billion a year by reforming federal contracting, particularly on defense spending, a process that has been beset by waste and abuse for years.

“The days of giving defense contractors a blank check are over,” Mr. Obama said, speaking to reporters in the Eisenhower Executive Office Building, and flanked by several lawmakers, including the man he defeated to win the presidency, Sen. John McCain, Arizona Republican.

Mr. Obama said that Peter R. Orszag, his budget chief, will work with agency heads to develop new guidelines for contracting by Sept. 30.

The president also signed an executive memorandum that will “reform government contracting by strengthening oversight and management of taxpayer dollars, ending unnecessary no-bid and cost-plus contracts and maximizing the use of competitive procurement processes, and clarifying rules prescribing when outsourcing is and is not appropriate,” the White House said.

The contracting process has resulted in massive waste of taxpayer money, especially since the Bush administration sped up and increased its expenditures on complicated weapons and computer systems in the wake of the Sept. 11, 2001, terrorist attacks.

The House Oversight and Government Reform Committee in 2007 found ” ‘significant waste, fraud, abuse or mismanagement’ in federal contracts worth a total of $1.1 trillion” from 2002 to 2006.

Mr. Obama said that his administration will work with Mr. McCain and Senate Armed Services Committee Chairman Carl Levin, Michigan Democrat, to institute reforms.

But the White House gave little detail about the reforms or about how they concluded that the changes will save $40 billion annually.

Both Republicans and Democrats agreed on the need to reform contracting during a fiscal responsibility summit at the White House last week.

Still, some Republicans on Wednesday mocked the president’s pledge to take on “wasteful government spending.”

“Will the president tackle wasteful spending when he signs into law the $410 billion ‘omnibus’ spending bill loaded with more than 9,000 earmarks? How is the president tackling wasteful spending in his breathtaking $3.6 trillion budget?” said Kevin Smith, a spokesman for House Minority Leader John A. Boehner, Ohio Republican.