Defense Contractors Are on the Chopping Block Defense Secretary Robert Gates’ plan for a slimmer military bureaucracy would cut spending on services and support contractors by almost one-third over three years. In his Aug. 9 announcement, Gates called for a 10% reduction in contract spending in those categories during each of the next three years. He also intends to eliminate some generals’ and admirals’ positions, freeze the number of employees in defense agencies and combatant commands (including his own office) and abolish the military’s Joint Forces Command. The plan ran into immediate pushback from Virginia’s congressional delegation. The Joint Forces Command is headquartered in Norfolk and many DOD support contractors work in Northern Virginia. Gates said the cutbacks are needed to free up more money for warfighting as federal budgets get squeezed by the mounting deficit. He did not estimate the amount of savings his new moves would generate, but in the past he has called for reducing spending on overhead by $100 billion over five 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 a media briefing. Gates acknowledged that the Pentagon’s year-old insourcing initiative has not worked as advertised. “We weren’t seeing the savings we had hoped from insourcing,” he said.  “...What we’ve learned over the past year is, you really don’t get at contractors by cutting people, because you give the contractor a certain amount of money and they go hire however many people they think they need to perform that contract. So the only way, we’ve decided, that you get at the contractor base is to cut the dollars.” He said most of the contractor jobs being eliminated will not be replaced by federal employees. The Professional Services Council, a leading contractor organization, said Gates’ admission validates industry’s belief that the savings from insourcing were exaggerated. But the council’s president, Stan Soloway, said the secretary’s “new, arbitrary reductions” are a mistake. Gates singled out the Joint Forces Command in part because it is heavily dependent on contractors. The command employs 1,600 civilian employees, 1,200 military personnel and more than 3,000 contractors. The Washington Post reported that nearly $500 million of the command’s $700 million annual budget goes to contractors. Gates said JF Command’s mission—implementing joint operations by the armed services—will be transferred to the office of the Joint Chiefs of Staff. Pentagon officials said President Obama has authority to abolish the command without an act of Congress, but Virginia’s congressional delegation was searching for ways to block it. Gates also intends to close the office for Networks and Information Integration and the Business Transformation Agency. Many of the steps were recommended by DOD’s Defense Business Board, an advisory panel. (SAA, 8/6) The board pointed out that the department does not have an accurate census of how many contractors it employs.