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Contractors not exempt from cuts, DOD says

Defense Secretary Chuck Hagel assured the Senate Appropriations Committee’s defense subcommittee that contractors will absorb their share of sequester spending cuts.

Defense Secretary Chuck Hagel assured the Senate Appropriations Committee’s defense subcommittee that contractors will absorb their share of sequester spending cuts.

To that end, Hagel told the panel, DOD is reviewing all of its contracts, according to a report from the American Forces Press Service. Hagel offered the details in testimony at a June 11 hearing concerning the Defense Department's fiscal 2014 budget request.

“The furlough process does include contractors,” Hagel told the lawmakers. “It includes companies, it includes acquisitions, it includes contracts.”

Another department official, DOD Comptroller Robert F. Hale, told the subcommittee that the largest share of the department's $37 billion in sequester-related cuts in the current fiscal year will come from defense contractors, 700,000 of whom work throughout DOD.

Of that amount, Hale said, "about $2 billion" in spending cuts will come from furloughs. Hale also said that the number of contractors will decline.

“I don't know yet how much, because the year isn’t over," Hale said, "but I think there will be a sharp drop.”

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