By David Alexander
WASHINGTON Feb 21 The Pentagon's top weapons
buyer on Thursday authorized Defense Department purchasers and
program managers to begin talking to industry partners about
plans for implementing $46 billion in budget cuts on March 1 and
what impact it may have on business.
The directions from Frank Kendall, the under secretary of
defense for acquisition, were the first time Pentagon
contracting and acquisitions personnel have been authorized to
consult with their industry counterparts about the upcoming
spending cuts, known as sequestration.
Kendall said in a Feb. 21 memorandum obtained by Reuters
that Pentagon purchasers and program managers were "encouraged"
to begin making contact with industry counterparts at the
discretion of their managers and chains of command.
"It is important we keep industry informed about our plans
and involved in our decision-making process to the maximum
extent possible, particularly when ongoing or upcoming contract
awards may be affected," Kendall said in the memo.
A company official, speaking on condition of anonymity, said
any Pentagon effort to help industry understand how the budget
cuts would affect their programs was encouraging.
"Significant delays in funding for any production program
could threaten the stability of our supply chains, increase
costs, prolong delivery schedules and ultimately weaken our
national security posture," the official said.
The authorization for Pentagon purchasing officials to begin
talking to their industry counterparts comes a week before $46
billion in across-the-board spending cuts are scheduled to go
into force on March 1.
Pentagon officials have issued dire warnings in recent days
about the potential impact of the cuts. The cuts will be
compounded by the fact that the department did not receive an
appropriation for this year and is being funded by a "continuing
resolution" that keeps spending at 2012 levels.
Officials say 2012 funding levels are about the same as
2013, but the budget priorities are different and much of the
money is in the wrong accounts. The Pentagon, they say, has
little flexibility to shift funds between accounts and is facing
a significant shortfall in some areas.
Kendall said talks with industry would help both sides
prepare more effectively.
"Engaging in this dialogue will allow industry to more
productively make their own internal business plans to deal with
potential sequestration impacts," Kendall said in the memo.
"Feedback from industry will provide valuable insights as
government managers decide how best to move forward in
attempting to meet the war-fighter requirements and DoD
(Department of Defense) needs under severely constrained
Kendall's memorandum also encouraged program managers and
grant officers to quickly notify companies and universities
carrying out Pentagon research about any plans to reduce their
grants or awards funding.
"Program and awarding officials ... should work together to
notify recipients as soon as practicable after decisions about
reductions are made so that recipients have as much time as
possible to adjust their program execution plans," Kendall's
The acquisitions chief said communication would need to be
more limited if proprietary information were involved or if the
contract was in the process of being awarded.
"However, as a general rule, transparency with industry and
academia while we plan for potential sequestration and CR
(continuing resolution) is in the department's long-term best
interests," Kendall said.