DoD

June 14, 2013

Defense contractors will share burdens of furloughs, Hagel says

WASHINGTON, D.C. — The Defense Department is reviewing all of its contracts, and DOD contractors will share the burden of spending cuts, including the furloughs facing the department’s civilian workforce, Defense Secretary Chuck Hagel told senators June 11.

Hagel testified before the Senate Appropriations Committee’s defense subcommittee this morning.

“Contractors are part of any institution,” he said. “We need them – certain skills, certain expertise.”

DOD Comptroller Robert F. Hale, who accompanied Hagel, told the committee that about 700,000 defense contractors work throughout the department. And they are in for some changes, he added.

“The furlough process does include contractors,” Hagel told the Senate panel. “It includes companies, it includes acquisitions, it includes contracts.”

The department is taking a $37 billion sequestration spending cut in fiscal 2013, which ends Sept. 30.

“The majority of that is going to come out of contractors – about $2 billion will come out of furloughs,” Hale said. That means a drop in the number of contractors in the department.

“I don’t know yet how much, because the year isn’t over, but I think there will be a sharp drop,” Hale said.

The senators asked about contractors because of newspaper reports about alleged National Security Agency leaker Edward Snowden receiving a $200,000 annual salary. Contractors generally receive more in salary than DOD civilian employees, Hale said.

“Whether or not a contractor or a civilian is cheaper or better really depends on the circumstances,” he explained. “There are some cases where we simply don’t have the skills in the Department of Defense that we need, or it’s a short-term job and it wouldn’t make any sense to grow them.”

If it is a long-term job, he added, it makes more sense to hire a civil servant.

 




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