Defense Secretary Confirms Contractor Spending Cuts

24 December 2010, U.S. – The cuts to contractor spending proposed by Defense Secretary Robert M. Gates are dramatically less than originally mentioned. Deputy Defense Secretary William Lynn cleared the issue of cuts in a meeting with local congressional representatives.

The planned contractor spending reductions will be in the “service support” category and represents a value of $4.3 billion rather than the $143 billion first mentioned.

Totaling about $400 million to $430 million per year, service support refers to every day Defense Department office staff.

In August, local officials and industry groups feared much worse as Defense Secretary Gates announced plans to reduce support spending by 10 percent annually over the next three years. The concerns were over the impact in the D.C. region where most services are carried out. Though it’s still unclear as to which companies that supply staff will be affected but it is obvious they will mostly be in the D.C region.

Now that local congressional representatives and industry groups are relieved from the revision in cuts, it’s time to get into more specific plans so they can monitor the implementation of cuts and prepare contractors.

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Posted by on Dec 24 2010. Filed under Finance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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