Pentagon Narrows Scope of Proposed Contractor Cuts
Stephen Losey

The Pentagon today said it would narrow the scope of proposed contractor cuts to service support contracts only.

Rep. Gerry Connolly, D-Va., said Deputy Defense Secretary Bill Lynn told a working group of lawmakers and contractor representatives that the Pentagon wants to cut 10 percent from its $4.3 billion service support contracts budget each year for three years, and not from Defense's entire $143 billion service contract budget.

Most cuts will come from contractors who perform staff functions in Defense offices, such as writing memos or preparing routine briefings, Connolly said. Information technology systems contractors and weapons systems support contractors will not be cut, he said.

Stan Soloway, president of the Professional Services Council, a contractor trade group, said until now it has been unclear where Defense Secretary Robert Gates' proposed cuts would come from, and he applauded the announcement.

"When Gates made his announcement, nobody knew what it meant," Soloway said. "This does a good job clarifying that it's not ‘sky is falling' cuts."

Connolly said the cuts will likely range between $400 million and $430 million each year.

"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," Connolly said. "Across-the-board cuts use a meat cleaver approach that cuts off the meat with the fat. Secretary Gates and DoD leaders have now pulled out the scalpel and are looking at strategic and specific places to make the scaled-down cuts."

Soloway said that businesses will now be able to better prepare for the cuts.

"Nobody likes it, but austerity is here to stay, and everybody's going to feel the effects of it," Soloway said. "Having as much information as possible is helpful, so you can plan and know what to expect, and it doesn't come out of the blue."

http://www.federaltimes.com/article/20101221/ACQUISITION03/12210304/1001