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FCW : July 30, 2013
Defense Secretary Chuck Hagel warned leaders of the Senate Armed Services Committee that $52 billion in potential cuts for the scal 2014 bud- get, which are mandated under seques- ter spending caps, would further erode military readiness and weaken national defenses. "I strongly oppose cuts of that magnitude because, if they remain in place for FY 2014 and beyond, the size, readiness and technological superiority of our military will be reduced, placing at much greater risk the country's ability to meet our current national security commitments," Hagel wrote in a July 10 letter to Sens. Carl Levin (D-Mich.) and James Inhofe (R-Okla.), the com- mittee's chairman and ranking member, respectively. "This outcome is unac- ceptable as it would limit the country's options in the event of a major new national security contingency." Hagel warned that "draconian actions" would be necessary to achieve those cuts. The moves could include extended hiring freezes and layoffs to avert a second year of furloughs. In addition, cutbacks in training and readiness could continue, investments in research and development would decline, and DOD's acquisition reform efforts would suffer, he said. He urged congressional support for measures Presi- dent Barack Obama has pro- posed, which include slowed growth in military pay raises, increased Tricare fees, and the retire- ment or cancellation of lower-priority weapons programs. Hagel also asked that Congress eliminate restrictions on military draw- down timelines and practices for ring poorly performing civilian personnel, and reiterated his push for another round of military-base consolidations and closures. --- Amber Corrin Hagel warns senators of 2014 budget dangers Trending is the annual salary being offered for the IRS' director of cybersecurity operations (see Page 7) $230,700 INK TANK 6 July 30, 2013 FCW.COM Chuck Hagel A season of gridlock Continued from Page 3 slightly reduced levels but not to the extent that they need to be in order to comply" with sequestration, she said. Plexico agreed that in 2014 and beyond, agencies are going to "build in more permanent reductions to bud- get baselines to make sure they're able to operate at sequestration levels for years to come." That could mean layoffs for federal employees instead of the furloughs that were used in 2013, he said, and that could mean less demand for computer hardware and software. "Traditional IT services are going to be pressured" as agencies pursue consolidation initia- tives with an eye toward saving money, Plexico said. McCann said she is most concerned about IT companies whose govern- ment business amounts to 5 percent or less of their net revenue. They might decide it's not worth the hassle of trying to make sales forecasts in a continuously changing budget climate and "might walk away from wanting to do business with the government," she added. "The reason that's particularly con- cerning is that you're losing valuable, innovative solutions that the gov- ernment needs at a time like this," McCann said. "When you're trying to focus on saving money, it's not the time to be shooing companies away from the federal market." The Defense Department's budget is facing a steeper decline than those of civilian agencies, but Plexico said there are a few sweet spots, including cyber- security and unmanned aerial vehicles. Contractors should not expect gen- eral growth, he added, but they should be positionining themselves for the opportunities that do emerge. --- Adam Mazmanian
July 15, 2013
August 15, 2013