By Jeremy Herb - 03/29/12 07:48 PM EDT
Kendall told senators the Pentagon would have to break fixed-price contracts on items like the KC-46 aerial tanker and the littoral combat ship, potentially driving costs higher on those programs.
“Across the department there are places where a devastating impact would occur, and of course that ripples down through all tiers of the industrial base,” Kendall said. “There would be hundreds of thousands of jobs impacted by it.”
Sen. Kelly Ayotte (R-N.H.) said that smaller contractors could go out of business due to cutbacks through sequestration.
“We're talking about small businesses that, if they are put out of business by sequestration, then it's difficult often to bring that capability back,” Ayotte said while questioning Kendall. “That's why we're concerned about our defense industrial base, and those are real jobs in this country.”
Kendall said some major firms have approached him about concerns over providing notice of potential layoffs, a legal requirement, because of sequestration.
Kendall’s comments echo those from Defense Secretary Leon Panetta, who has repeatedly called sequestration a “meat-ax approach” and a “gun to the head” in his congressional testimony.
On weapons contracts, Kendall said sequestration would require the Pentagon to break a number of contracts and re-negotiate, which would cause the price to likely increase.
“You're essentially opening it up and you have to go get another price,” Kendall said. “Once you don't have a competitive environment, it's much more difficult for us to negotiate a lower price.”