Agencies have been asked to pay especially close attention to spending on contracts for management support services. Spending on these services – which include activities as varied as engineering and technical services, acquisition planning, and IT systems development – has quadrupled between FY 2000 and FY 2010, going from roughly $11 billion to $44 billion. Agencies are twice as likely to buy these services using high-risk contract pricing arrangements that put agencies at greater cost risk than when fixed-prices are used. These services are also frequently cited as creating a potential risk of overreliance on contractors for critical activities related to agencies’ missions and operations.

By the end of FY 2012, CFO Act agencies must cut spending for management support services by 15 percent. Agency progress on meeting this goal will be measured based on obligations in FPDS for the services identified in the table below, which were settled upon after discussions with agencies. Instead of paying $44 billion for these services, as they did in FY 2010, they will reduce spending to $37 billion a year by the end of FY 2012 – a decrease of $7 billion. To meet this goal, agencies will buy smarter and buy less. They will continue to make good use of the expertise, innovation, and capabilities of contractors for a wide range of management support activities, such as program evaluation, to support their efforts to invest in what works. However, in this tight budget environment, agencies will be more fiscally responsible in how they acquire contracted services.