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DEFENSE COMMUNITIES 360

Impact of Senate’s Proposal to Cut Contract Services Unclear

  • June 22, 2011
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The Senate Armed Services Committee’s recommendation to cut DOD’s operation and maintenance accounts for contract services by $1.1 billion in fiscal 2012 may not dramatically affect contractor hiring and pay. The proposal would freeze the contract services account at FY 2010 levels.

The reduction, included in the defense authorization bill approved by the committee last week, would result in the department awarding fewer contracts and some companies trimming staff, but the move does not necessarily mean there will be an across-the-board freeze on contractor hiring or pay, Alan Chvotkin, executive vice president of the Professional Services Council, told GovernmentExecutive.com.

“There may be opportunities to reduce spending on current work with the current federal workforce and contractor workforce to achieve savings,” he said.

Over the long term, however, pressure to pare spending could result in pay freezes into the future, Ray Bjorklund, senior vice president at FedSources, told the publication.

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