I’m getting really tired of bloggers and news media pretending that the sequester is not affecting people. It is. It’s the capstone of four years without a budget from the Obama administration, which has been devastating the defense industry. Because there is no budget, federal agencies are not fulfilling orders in contracts that have been won. This is apparently all going on behind the news. For those of you not in the industry, it works like this. Lockheed Martin (for example) wins a contract to service aircraft for the Navy. (I’m totally making this up.) The contract has a billion-dollar ceiling, meaning that the Navy will pay up to $1 billion for the service. That billion dollars will pay for hiring people, setting up the necessary facilities, managing them, servicing the aircraft, and everything in between. It is filled with task orders, which are specific dollar amounts for specific services, like maintaining helicopters. (Still making this up, bear with me.) So, you have a billion dollar contract, which is worthless unless you get the task orders.
Those task orders are not being submitted. Instead of having hundreds of millions of dollars in task orders, defense companies are getting them in the tens of millions. And as a result, the defense businesses have been laying off people for years. This isn’t a case of cutting out the fat. This is a case of people being laid off because the government hasn’t been running properly for four years. And the Obama administration is getting a pass.
But conservative bloggers and media are giving the sequester a pass, and that’s not what’s happening. The sequester has caused that trickle of task orders to turn into a standstill. No one is spending money. And civilians are suffering, not Federal employees.
Shioban Green, Knott’s boss, has been running the company with her husband, Andrew, for 11 years. “There’s sort of this general freezing that I’m finding,” Green says. “I’ve got one contract we submitted in May 2011 that I’m still waiting on being awarded.” They have work now, but there’s little on the horizon. Unless new contracts come in, Green says, they will be forced to make more cuts.
This single layoff does ripple through the local economy. Knott has already cancelled her gym membership at Vantage Fitness, and called off her monthly personal training session. That means the gym is down $90 a month.
On her way into the office, Knott typically orders a medium soy chai from Starbucks with a spinach egg wrap. That’s about $8.00. Lunch is typically another $10 dollars. There’s CVS, where she estimates she spends about $15 a week. Her dry-cleaning bill will be lower, since it will just be her husband’s work clothes, not hers.
Stephen Fuller, director of the Center for Regional Analysis at George Mason University, explains Knott’s impact. “She’s an economy unto herself, and her economic wings have been clipped. She can’t spend as much.”
And it’s been happening for years.
July, 2011
Bethesda-based Lockheed Martin said Tuesday that it is offering a voluntary layoff program for about 6,500 U.S.-based employees, the latest in a string of recent moves to cut jobs at the company.
As Congress debates massive defense cuts, one of the globe’s biggest defense companies has slashed 740 jobs in a D.C.-based unit as part of a program aimed at reducing the company’s overhead.
Federal News Radio reports that 308 employees at Lockheed Martin’s D.C. headquarters were told Tuesday that “they will no longer have employment with the company.” Another 432 employees left in May under a “voluntary layoff program.”
Lockheed Martin’s Gaithersburg-based information systems unit is offering a voluntary layoff program for a “select group” of mid-level managers.
The move comes as defense contractors are struggling to show growth in their information technology businesses. Falls Church-based competitor General Dynamics, for instance, said last month it was devaluing its information technology business by $2 billion in response to falling government demand.
A Reston, Va.-based government contractor sent employees notices of potential layoffs due to across-the-board budget cuts from sequestration,The Washington Post reported.
Serco Inc. sent out Worker Adjustment and Retraining Notification Act notices to 770 employees in Maryland and Virginia. Candy Curtin, the company’s senior vice president for human resources, told the Post Serco was “advised by an attorney” that the notices would be the “best course of action.”
Let’s stop pretending that the sequester isn’t doing any damage, or that the Obama administration is exaggerating the impact. Congress has been broken for years. Our representatives say they give a damn, and yet, they refuse to pass a proper budget. Funding for all things defense-related could begin again if they would get down to the business they’ve been elected for.
And perhaps my fellow bloggers could open their eyes and stop pretending that people aren’t being hurt by the sequester. These aren’t overpaid Federal employees. They’re the people who do the jobs that the Federal government started outsourcing decades ago, and if they aren’t doing them, and our armed forces aren’t doing them–there’s something really wrong with America’s defense.