Contractors Should Not Panic Over Program Cuts
By Sandra I. Erwin
It is a difficult political environment for defense contractors today, but there is no reason to panic, and business is still good, says David Berteau, a senior advisor at the Center for Strategic and International Studies.
Pentagon plans to replace contractors with public servants are not going to significantly hurt the industry’s bottom line, Berteau says in an interview with the ExecutiveBiz blog. The numbers — 21,000 acquisition contractors to be phased out over five years — are fairly small, he says. “From an industry point of view, I don’t think it is a great reduction in the opportunities for business. Certainly it does not represent a reduction in the dependence on contractors,” he says. “Nobody should worry about being on a going-out-of-business curve. Overall it’s still a good business.”
In the next 18 months, however, the Pentagon will make decisions that will shape defense industry for a decade or more, he says. “That’s what industry needs to be watching.”