Obama Says "Blank Check" Days are Over, Suggests More Contracts for Small Businesses

President Obama promised major defense contracting reform and a $40 billion savings in a speech Wednesday morning (the Boston Globe's coverage includes his full remarks.)

Here's one especially meaty cut:

We will stop outsourcing services that should be performed by the government, and open up the contracting process to small businesses. We will end unnecessary no-bid and cost-plus contracts that run up a bill that is paid by the American people. And we will strengthen oversight to maximize transparency and accountability. Altogether, these reforms can save the American people up to $40 billion each year.

Since so much of the early fraud in Iraq came from small operations chasing contracts beyond their means, I wonder what these small businesses are going to look like. Are these American businesses with narrow expertise, or small, local operations employing Iraqis?

It'll be interesting to see how well the government can tighten oversight while opening the contracting process to a new set of small companies.