Following on the heels of proposed cuts to defense contracts, Deputy Defense Secretary William Lynn recently clarified these cuts will affect a more narrow part of the overall contract budget.
In a meeting at the Pentagon, Lynn and other officials explained Defense Secretary Robert Gate’s proposal to cut service support contracts by 10 percent annually during the next three years will apply only to a small portion of the overall contract budget. DoD officials said Gates is focusing on 4.3 billion in cuts for service support contracts that provide staff that work at DoD headquarters and perform similar functions to federal employees, rather than the entire $143 billion budget for services contracts.
"While I am still concerned about the effect of these defense contractor cuts on the economy of Northern Virginia and the Washington area, we are making progress," said Rep. Gerry Connolly, D-Va, in a statement. Connolly is among a bipartisan group of Northern Virginia congressmen and senators formed to address the proposed DoD contractor cuts.
Washington area contractors were particularly concerned with Gate’s proposed cuts, since federal procurement accounts for nearly one-third of Virginia’s economy and defense spending is responsible for nearly one-in-five jobs in the Washington area.
Last summer, Connolly said DoD officials had offered no business case, no metrics and no analysis to justify the arbitrary contracting cuts. He warned that the cuts could fall heavily on smaller contractors and questioned whether the cuts would hurt national security interests.
“So-called across-the-board cuts generally don’t work and are often offered in lieu of strategic, specific cuts,” Connolly said. “Instead of taking a scalpel to programs to cut out the fat and inefficiencies, across-the-board cuts use a meat cleaver approach that chops off the meat with the fat.”
While defense contractors may feel relieved with the clarification, further contractor cuts may be announced in 2011 as procurement is expected to continue to be scrutinized.