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Budget provision could sharply reduce defense contractor jobs

They fret about provision in budget that would reduce support services to pre-2001 levels.

Defense Secretary Robert Gates testifies on Capitol Hill in Washington, Wednesday, May 20, 2009, before a House Appropriations-Defense subcommittee hearing on the Defense Department'sbudget. (AP Photo/Haraz N. Ghanbari)

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Area defense contractors’ future unsure

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By Jessica Wehrman, Staff Writer Updated 9:22 PM Sunday, May 24, 2009

WASHINGTON — The U.S. military is hiring — and for the region’s defense contractor workforce, that may be a mixed blessing.

On one hand, private contractors in the region might find new opportunities inside Wright-Patterson Air Force Base’s gates as the Air Force ramps up its acquisitions workforce by some 20,000 nationally by 2015. They’re also hopeful that the estimated 1,200 new jobs expected to come to the region through BRAC also might prove a boon.

But with hope comes worry: Defense contractors are fretting about a provision in the budget that would convert support service contractors from the current 39 percent of the workforce to pre-2001 levels of 26 percent.

According to Defense Secretary Robert Gates, contractors will be replaced with 13,800 government employees nationwide, with many contractor positions being converted to government employee positions.

Under questioning by U.S. Rep. Mike Turner, R-Centerville last week, Air Force officials admitted that they might not hire a full-time employee for every contractor job they hope to eliminate. “The end result could be fewer people than they currently have,” Turner said.

The budget has yet to pass Congress, and it’s unknown what it will look like in the end. Still, there’s a degree of uncertainty among the region’s defense contractors, who are trying to figure out what it all means for them.

“It’s something we have to watch,” said Joe Zeis of the Dayton Development Coalition, whose members include defense contractors.

The coalition — and individual contractors in the region — worry in particular that the Defense Department will take a “cookie cutter” approach to converting defense contractors to government employees. That’s not always an easy sell at Wright-Patterson Air Force Base, where many contractors work in a heavily specialized, technical areas.

John McCance, president of the state’s Air Force Association, said the transition could be a rough one.

Some of the contractors who work at the base are “world-renowned people that have been hand-picked by the government for their capabilities,” he said. “And the government is not structured to be able to pay these people the type of salaries they deserve for the level of expertise they bring to the table.”

A 2007 economic impact analysis by the 88th Air Base Wing indicates at least 5,350 Wright-Patterson workers are contractors rather than direct federal government employees. That statistic does not include those who work outside the fence who also may support Wright-Patterson Air Force Base. Turner said he’s worried about two things with this change: He wants to make sure the government hires enough people to make up for the expertise offered in the contracting community. And he wants to make sure the government provides enough wages and security to attract the brainpower in that community.

Loren Thompson, a defense analyst with the Lexington Institute, calls the budget “double jeopardy” for the region. He points to cuts in major Air Force programs, such as the F-22, as also having an impact. While the military is adding acquisitions jobs, he said, they’re also eliminating major aircraft.

“Wright-Patterson is sort of ground zero for the Air Force acquisitions community,” he said. “And so there are many hundreds, probably thousands of contractor jobs associated with the activities on the base. And some of those jobs are going away.”

The changes could present an opportunity for contractors, he said. “But there’s no guarantee you’ll get hired, so this is going to cause some anxiety among contractor personnel who are affected.”

But Thompson said a generalized concern in Washington about the possibility of waste and inefficiency in the Pentagon also spurred Gates’ decision to ramp up government employees and ramp down contractors.

Those decisions, said Larry Korb, a former University of Dayton professor now at the Center for American Progress, have nothing to do with workers and contract workers at Wright-Patterson and everything to do with larger issues of how the federal government is spending its money. He said the fiscal 2010 budget is a direct response to the downsizing of the federal government in the 1990s.

The government ended up cutting too much, he said, and the Bush administration hired contractors to compensate. Ultimately, he said, “procurement spending got out of control.”

He predicts minimal impact. “You just have people getting their paycheck someplace else,” he said.

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