Acquisitions, small business will suffer if DOD sequester continues in 2014
Defense Department furloughs and budget cuts from sequestration spending cuts could lapse into 2014, disproportionately hurting small businesses and compromising military technology readiness, the Pentagon’s top acquisition official said Monday.
The across-the-board cuts reduced the Pentagon’s budget $41 billion this year. Research, deployments, operations and training have all been affected. Last Friday, roughly 85 percent of DOD employees started receiving notification they would be furloughed up to 11 days beginning July 8.
On June 3, Frank Kendall, undersecretary of defense for acquisition, technology and logistics, said the sequester cuts could continue to 2014. If they do, acquisition will take a big hit.
“It’s a reasonable possibility that we will go into 2014 with sequestration still underway,” he said at the 2013 Navy Opportunity Forum in Arlington, Va. “A lot of things we planned on doing we won’t be able to do.”
And these discarded plans could particularly hurt small businesses, Kendall said.
“The cuts we are going to experience potentially will fall on small businesses,” more than on large military contractors, he said. The Pentagon’s current 2014 budget is $52 billion above sequestration levels, and officials have not decided whether to submit an alternate budget or work on finding the cuts with Congress.
The audience at the Navy Opportunity Forum included representatives from companies producing advanced technologies funded by Navy programs. They stand to lose research and development contracts if sequester cuts hold into 2014. In May, Lockheed Martin CEO Marillyn Hewson called on DOD to give more specifics — for 2013 and beyond — to contractors on how the department plans to meet its budget requirements.
“What would we have to do at the department if we had to take $50 billion a year out over the long term? That would be pretty devastating,” Kendall said.