Defense Contracting Cuts Will Be “Relatively Minor” The Defense Department has drastically scaled back plans to cut service contractors, according to people who were briefed on the matter. Instead of paring service contract spending by up to 30% over the next three years, Deputy Defense Secretary William Lynn has outlined targeted cuts aimed at reducing overhead expenses in such areas as advisory and assistance services and staff augmentation. “It’s a relatively minor subset of the universe,” said Stan Soloway, president of the Professional Services Council. Soloway and others were briefed on the plan at a Pentagon meeting with Lynn and other officials before Christmas. Soloway said the savings will amount to about $430 million annually, a tiny fraction of DOD’s estimated $150 billion in spending on service contracts. Virginia Democratic Rep. Gerry Connolly, who also attended the briefing, said that “the cuts will target service support contractors that come into a headquarters building each day, have a desk, phone number, and email address, and perform staff functions such as writing memos or preparing routine briefings. DOD official specifically noted that IT systems contracts and weapons system support are not on the chopping block.” As DOD officials explained it, they will eliminate some administrative, technical and engineering support positions. Contractor jobs that are abolished will not be insourced. Decisions on which positions to cut will be left up to individual activity commanders. Defense Secretary Robert Gates announced in August that spending on support services contracts would be reduced by 10% in each of the next three years. “I concluded that our headquarters and support bureaucracies—military and civilian alike—have swelled to cumbersome and top-heavy proportions, grown over-reliant on contractors and grown accustomed to operating with little consideration to cost,” he said at an Aug. 9 media conference. Connolly and other Virginia members of Congress had protested Gates’ plan because of its heavy impact on the state, especially Connolly’s Northern Virginia district. After the December briefing he said, “Where we originally feared annual contractor cuts of as much as $14.3 billion per year, it now appears that those three years of cuts will be in the range of $400 to $430 million per year.” Soloway, who heads the leading trade association for service contractors, said, “If it’s done right, you can’t argue with it.” In an interview, he noted that Secretary Gates has also imposed a hiring freeze in defense agencies and combatant commands, including his own office, and plans to abolish the Joint Forces Command and two other DOD offices.