Small Defense Contractors Brace for Sequestration
When the government "Super Committee" failed to reach a deal on a $1.2 trillion deficit reduction package last year, it triggered the possibility of Sequestration which will begin January 1.
The cuts in defense spending and other domestic spending has many worried, especially small defense contractors doing business with Robins Air Force Base.
"Sequestration is a train wreck."
That's how Warner Robins defense contractor Robert Golson describes the governments plan to cut $1.2 trillion over 10 years starting January 1 unless Congress passes another budget deal that will trim the 1.2 trillion figure.
"They're going to kick it down the road a little bit, it's too drastic," said fellow contractor Gary Cox of NAVCOM Defense Electronics.
Cox says he believes Sequestration will happen. The reduced budget means small contractors like him will have to work harder to get business while doing less than what they have in the past
"Defense contractors will all land for some reduced budgets," said Cox. "That's kind of the future we have to look forward to, but I do think that the strong contractor will survive."
The end result can be bad to devastating.
"It can be the end of a number of small businesses because there's just no work to compete for," said Golson. "The pool will dry up substantially."
Prime companies such as Lockheed Martin and Boeing are set to take the brunt of the cuts when it comes to loss of personnel.
"Our overhead and our cost are typically lower than the big companies," said Golson.
"it will be hard for us to complain about losing one or two people when they're going to lose hundreds," added Cox.
If Sequestration takes effect, Golson says his employer (KIHOMAC) has plans to diversify.
"We're looking at commercial costumers, we are looking at foreign military sales, any market that has the similar type work."
$109 billion is set be cut when Sequestration takes effect in 2013. On the campaign trail, President Obama vowed that Sequestration will not happen.