26 Dec '12, 11am

Even if DoD is spared from the sequester, the business climate for Pentagon contractors will be bleaker in 2013

Even if DoD is spared from the sequester, the business climate for Pentagon contractors will be bleaker in 2013

The Defense Department and its contractors are still hopeful for an 11th hour deal that will shield the Pentagon from a 10 percent budget cut in 2013. But even if Defense is spared from the sequester, the business climate for Pentagon contractors will be bleaker in 2013, analysts predict. Whereas the defense budget top line peaked in 2010 and has only dipped slightly, projected spending on new equipment already has declined by one-third since 2008 and is on a path to go down another 10 to 15 percent, says Erich Fischer, a partner at the consulting firm Booz & Company. The reductions in procurement spending have not yet hit home for many companies because the actual outlays of funds lag behind budget projections by two to three years. The budget began to come down in 2008, outlays peaked in 2010 and companies are now starting to feel the effects of a drying funding stream, ...

Full article: http://www.nationaldefensemagazine.org/blog/Lists/Posts/P...

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