Sequestration Hearing: Contractors Dramatically Complain About Potential Job Cuts, Supplier Impacts, Lack of Guidance

In what House Armed Services Committee Chairman, Buck McKeon (R-Calif.) called perhaps the most “important hearing I have ever attended,” the committee and four defense contractor leaders discussed the impacts of sequestration on industry. Five main themes emerged:

• Dramatic language and colorful metaphors to describe sequestration
• Lack of numerical specificity on impacts
• Complaints about the lack of federal government guidance
• Concern about the impacts on second and third-tier suppliers
• Reluctance to offer solutions to the fiscal crisis

The four witnesses were Robert J. Stevens, chairman and CEO of Lockheed Martin; David P. Hess, president of Pratt & Whitney and chairman the Aerospace Industries Association; Sean O’Keefe, chairman and CEO of EADS North America and chairman of the National Defense Industrial Association and Della Williams, president of women-owned small business Williams-Pyro.

Dramatic Language

McKeon started this trend in his opening statement by saying sequestration brings a “host of planning challenges” and is “bad policy that should be replaced.” Stevens started his presentation by saying sequestration has caused a “near-term horizon completely obscured by a crisis of uncertainty” and called the process itself a “blunt force trauma.” O’Keefe termed sequestration as as “administrative disruption,” that will cost as much money as the cuts actually save. Hess called it a “band-aid to a bullet wound”, while Williams had the best line of the hearing when she called it “cosmetic surgery with a chainsaw.”

Unspecific Impacts

Stevens believes sequestration will devastate the defense/industrial base and impact its ability to give the military the proper equipment. In his statement, Stevens said the he could not estimate how many employees would be impacted, but when pinned down for specifics by Rep. Allen West (R-Fla.), he made what he called a “crude estimate” of 10,000. Citing the figure of Lockheed Martin receiving one million resumes per year, he bemoaned that some talented students are asking whether defense contracting would give them the proper job security. Frustrated with the overall lack of specifics from the panelists, West also got him to disclose which programs would be most impacted:

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