Cuts in defense contracting raise many questions

Defense Secretary Robert Gates’s abrupt announcement in early August that he plans to arbitrarily cut defense contracting by 10 percent per year for three years and close the U.S. Joint Forces Command raises many questions that should have been addressed before the secretary put this process into motion.

It was no surprise that Gates’s plan drew swift reaction from a bipartisan coalition of federal and state officials in Virginia because federal procurement accounts for nearly one-third of the commonwealth’s economy, and defense spending alone is responsible for almost one in five jobs in the commonwealth.

I have no beef with Secretary Gates’s goal of controlling defense spending. In fact, I applaud it. But I do have concerns that the proposal for across-the-board cuts and the wholesale closing of an entire military command were done without any analysis and could have serious implications for national security.

By sheer definition, cuts of any kind should result in a cost savings, but it is questionable whether Gates’s proposals will save any money at all.

Arbitrary across-the-board cuts generally don’t produce the desired result and are not a strategic means of achieving cost savings. Gates admitted as much when he pointed out that previous efforts to reduce federal contractors did not achieve the savings the Department of Defense had hoped to achieve from insourcing.

I learned during my 14 years in local government that so-called “across-the-board” cuts generally don’t work and are often offered in lieu of strategic, specific cuts. 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.

So far, DoD officials have offered no business case, no metrics and no analysis to justify the arbitrary contracting cuts or the wholesale elimination of USJFCOM. The best we have heard in briefings from DoD is that Secretary Gates had made a “philosophical” decision and the only analysis conducted has been “conceptual” in nature.

We also need to take a hard look at who will be hurt by these arbitrary cuts in contracting. Those of us who meet regularly with small contractors from our congressional districts, who have been pushed around or treated less than fairly by the federal government, already know the answer. These cuts will fall heavily on these smaller contractors, many of them owned by minorities, women and disabled veterans. The large contractors have the legal teams and the resources to fight back and weather such cuts. The little companies don’t. They are the low-hanging fruit that will bear the brunt of the cuts and in this tepid recovery the loss of a contract could push them out of business.

There are serious ramifications on several levels that could result from these arbitrary cuts. Besides the obvious impact on the economy and workforce in Northern Virginia and other regions of the state and nation that have high concentrations of federal contractors, there are serious concerns about whether these arbitrary reductions will hurt DoD’s national-security interests.

There are no promises that the expertise lost when contracts are cut will automatically flow into the federal workforce. Take, for example, Secretary Gates’s proposal to consolidate defense Internet Technology (IT) assets. This proposal will most assuredly increase, not decrease, DoD’s reliance on contractors because most of the expertise resides in the private sector. We know from experience that the best way to achieve cost savings in federal, including DoD, IT programs is through a partnership between the public and private sectors.

We need answers on the rationale and reasoning behind Secretary Gates’s decision to make arbitrary cuts in defense contracting without the appropriate analysis and metrics to back it up.

During the next week, two House committees and one Senate committee will attempt to determine DoD’s justification of Gates’s proposals and the details behind them. Like many of my colleagues, I applaud Secretary Gates’s goal of cutting defense spending, but I hope DoD will work with Congress to make sure any cuts that are made result in real savings and don’t hurt national security by depriving our nation of the specialized expertise that can be found in the private sector.

Rep. Connolly serves on the Foreign Affairs Committee and the Oversight and Government Reform Committee