PSC: Contractors Not Immune to Budget Reductions

Arlington, Va., May 1, 2012—In a letter to 26 senators, the Professional Services Council has debunked the myth that budget austerity has not impacted federal contractors. 

In an April 30 letter to Sens. Sherrod Brown, Kirsten Gillibrand and 24 other Democratic senators, PSC responded to their April 25 letter to the Defense Department expressing concerns that contractors have not been subjected to comparable constraints as those being placed on federal workers in the current budgetary climate. 

“Your suggestion is contrary to the facts and leads to misconceptions and potentially harmful policy initiatives,” said PSC President and CEO Stan Soloway.  “Simply put, contractors are feeling the effects of the fiscal environment directly and significantly.”

“We recognize that we all must share the burdens associated with addressing our nation’s fiscal challenges,” Soloway said. “Unfortunately, inaccurate presumptions such as those contained in your letter are not helpful to the broader dialogue on how we, collectively, can address those challenges.”

PSC’s letter pointed to the $20 billion drop in overall government spending on services contracts between fiscal years 2010 and 2011 that resulted in the loss of tens of thousands of well-paying, private-sector job nationwide. Further, since 2009, the department’s expenditures on services, as a percentage of total DoD outlays, has dropped almost 10 percent. Congress and the administration also froze services contracting expenditures at the level of the president’s 2010 budget request. Further, OMB last year directed all federal agencies to reduce spending on services by 15 percent in 15 categories over a 15 month period. 

“Contractors and their employees have not been, and are not now, immune from the budget pressures,” Soloway said. “To be clear, we do not support arbitrary caps on or reductions to the federal workforce any more than we support them for contractors. We support providing agencies with the flexibility to manage their personnel and resources as strategically as possible so that they can optimize their ability to meet their mission requirements, particularly in a resource-constrained environment.”
PSC’s full letter to the senators is available here. A companion PSC letter to 131 Democratic House lawmakers regarding a similar letter they wrote to Secretary Panetta on March 26 is available here


About PSC: PSC has been the voice of the government professional and technical services industry for 40 years. PSC’s nearly 350 member companies represent small, medium, and large businesses that provide federal agencies with services of all kinds, including information technology, engineering, logistics, facilities management, operations and maintenance, consulting, international development, scientific, social, environmental services, and more. Together, the trade association’s members employ hundreds of thousands of Americans in all 50 states. Follow PSC on Twitter @PSCSpeaks and @StanSoloway.