Defense

September 6, 2013

Official predicts bleak budget picture for fiscal 2014

Budget pressures mean defense acquisition workers’ lives “are going to stay difficult for a while,” their chief told the workforce at Naval Air Station Patuxent River, Md., this week, but he reminded them that they have a critical mission for the country.

Frank Kendall, undersecretary of defense for acquisition, technology and logistics, visited here Sept. 3 to discuss the Pentagon’s Better Buying Power 2.0 initiative and listen to workforce feedback after what he acknowledged has been a challenging summer.

“Pax River,” as it’s commonly known, is home to Naval Air Systems Command and Naval Air Warfare Center Aircraft Division headquarters, as well as more than 50 tenant activities. Staffs here provide the full spectrum of acquisition management, research and development capabilities, air and ground test and evaluation, aircraft logistics and maintenance management. The installation supports land-based and maritime aircraft and engineering, test, evaluation, integration, and life cycle support for ship and shore electronics.

Kendall told workers the now-completed civilian furloughs, which cut workers’ hours and pay by one day a week for six weeks, were a last resort in the face of steep sequestration-mandated spending cuts that might otherwise have left the military in a dangerously low state of readiness.

“I’m sorry we had to do it,” he said, emphasizing that Defense Secretary Chuck Hagel and other Pentagon leaders exhausted all other possibilities before reluctantly approving what amounted to short-term layoffs.

Kendall said he can’t predict what the new fiscal year will bring to the Defense Department when it begins Oct. 1.

“The budget situation we’re in is pretty much unprecedented,” he said. “I have not [before] seen this kind of gridlock on Capitol Hill.”

Kendall said he doubts that sequestration, the provision in budget law that imposes across-the-board spending cuts to counteract budget deficits, will go away this year. Congress can de-trigger the automatic cuts, he said, but he added that he sees no appetite for doing so.

“The impact of sequestration, while it is very real, is also very distributed,” Kendall said. He noted that wholesale program cancellations, which people might expect to see, have been avoided so far, “because we’re trying to do our jobs.”

Sequester will cut about $52 billion from the 2014 defense budget, he said, and leaders will begin implementing those cuts in October. While the Office of Management and Budget hasn’t issued guidance yet for fiscal year 2014, Kendall said, “my expectation is we will start assuming sequestration from Day One.”

Military personnel cuts take time, he explained, and military pay is likely to be exempt, so the burden of those cuts essentially falls on the civilian workforce and contractors, along with investment accounts — his area of acquisition, technology and logistics.

The military culture is to “put your head down and get the job done” no matter the circumstances, he said, and the acquisition workforce continues its push to get the best value for taxpayer dollars.

“I do think we have to be vocal about what’s going on, though. … And I think it’s going to be a lot worse going into [fiscal 2014],” he said.

Kendall said he hopes furloughs will not be repeated, but that while he also hopes DOD can avoid a reduction in force of the civilian workforce, it may be necessary.

“The odds of a [reduction in force] not happening are not so good,” he acknowledged, though he added that defense leaders are researching alternatives.

“I don’t see us getting to a time soon where we get out of the mess,” Kendall said. “But I do think that as the damage becomes more visible, Congress will have to act and de-trigger [sequestration.] I just don’t know how long it’s going to take.”




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