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Washington, D.C. —A report today by the Office of Management and Budget (OMB) that federal contracting showed a year-to-year decline in fiscal 2010 for the first time since 1997 is welcome news and a positive development for taxpayers, the leader of the nation’s largest independent union of federal employees said today.

“I am pleased to see progress in the administration’s efforts to address the runaway contracting that for far too long has been a serious national problem,” said NTEU President Colleen M. Kelley. “Still, while this is a good step forward, there remains a considerable amount of work to be done to get contracting to a realistic level,” she added.

OMB Deputy Director Jeffrey Zients and Office of Federal Procurement Policy (OFPP) Administrator Dan Gordon said in a press conference that contracting by federal agencies declined in fiscal 2010 to $535 billion from $550 billion the previous year.

President Kelley and NTEU long have been the leaders in efforts to rein in the federal work performed by costly, unaccountable contractors. While supporting administration efforts undertaken in 2009 to reform federal contracting, Kelley has continued to press for the return of contracted work to the hands of federal employees.

One of the union’s key goals was realized nearly two years ago, when, as the culmination of a five-year legislative and media effort by NTEU, the Internal Revenue Service ended its use of private tax debt collectors.

Further, NTEU’s work with Congress has led to legislative moratoriums on new public-private competitions for federal work and provided support for legislation not only to limit government privatization efforts but to reform the entire federal contracting process.

President Kelley also cautioned that efforts by some in Congress to cut agency budgets would result in more work to be turned over to the private sector. “If Congress is serious about saving money, lawmakers should look more closely at the contracting process,” Kelley said.

Moreover, the union continues to press for a more appropriate definition from OMB of ‘inherently governmental’ functions that cannot be contracted out—including repudiation of an earlier OMB presumption that a government function is commercial in nature unless affirmatively shown otherwise.

OMB Deputy Director Zients and OFPP’s Gordon said that without the Obama administration’s effort, and if contracting had continued to grow at the 12 percent annual rate experienced during the previous administration, private contracting would have reached $615 billion in fiscal 2010. Zients called the result made public today a “very significant milestone.”

The White House in 2009 set a variety of goals impacting federal contracting, including reducing its overall level, improving oversight of contractors and strengthening the federal acquisition workforce.

NTEU supports a variety of OMB measures, Kelley said, including pooling purchases by agencies and buying only the products and services actually needed—but she has emphasized in particular the need for agencies to review private sector contracts and take back contracted work.

The NTEU leader also pointed to Senate testimony presented earlier this week by the Government Accountability Office (GAO) that underscored the need for improved agency oversight of contractors.

Testifying before the Senate Homeland Security and Governmental Affairs Subcommittee on Contracting Oversight, GAO identified issues with contract management oversight, agency controls over contract payments and internal control deficiencies throughout the contracting process—including contract auditing. The subcommittee is chaired by Sen. Claire McCaskill (D-Mo.), who has said one way to reduce government spending it to target waste, fraud and abuse in federal contracting.

NTEU is the largest independent federal union, representing more than 150,000 employees in 31 agencies and departments.