June 24 2011 Copyright 2011 Business Research Services Inc. 301-229-5561 All rights reserved.

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Senate Panel Wants DOD Contract Spending Freeze

The Senate Armed Services Committee voted to freeze Defense Department contract spending at 2010 levels, in line with a proposed freeze on federal employee salaries.

The committee’s 2012 defense authorization bill calls for a $1.1 billion cut in DOD’s operation and maintenance accounts for contract services.

The bill would prohibit defense agencies from collecting information about contractors’ political contributions. The Obama administration has been circulating a draft executive order that would require contractors to report their political spending, but the idea has run into opposition from industry and many members of Congress. No final order has been issued.

The House version of the defense authorization bill, adopted in May, would also block the executive order.

The Senate bill would reduce the Defense Department’s request for O&M spending on business systems by $230 million; cut $269 million in Air Force O&M funding for administration and other service-wide activities; lop off $130 million from O&M accounts for military intelligence; and cut $10 million from the Army’s request for O&M funding for joint DOD support and strategic communications.

The bill also calls for stronger management of service contracts, which the committee said could result in “significant savings.”

It would reduce military construction by $1 billion and prohibit creation of any new data centers until existing ones are fully utilized.

After both houses have acted, the final version of the authorization bill is usually written by a conference of the House and Senate.


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