Analysis: Defense contractors already reducing workforce

Thursday - 8/9/2012, 12:44pm EDT

By Jason Miller
and Jolie Lee

Analysis by a government watchdog group questions the real impact sequestration would have on defense contractors.

The Project on Government Oversight reviewed the size of five of the largest defense contractors and found three of the five were reducing their workforces while the Defense Department's procurement budget ballooned between 2006 and 2011.

POGO found DoD spent $113 billion in 2011 &mdahs; money that went to Lockheed Martin, Boeing, Northrop Grumman, General Dynamics and Raytheon — nearly a 25 percent increase since 2006.

Yet, only Boeing and General Dynamics increased the number of workers they employed from 2006 to 2011.

POGO said the data shows "the top five defense contractors, collectively, were cutting jobs while being awarded more taxpayer dollars."

POGO acknowledged the limitations of its analysis, including that its review focused only on the largest companies. And it is unclear how many of the companies' employees were working on a government contract in any given year.

Contractors have said sequestration would have devastating effects on them.

"From a contractor's standpoint, we also are looking at a fiscal cliff that's coming at us," said Marion Blakey, President and CEO, Aerospace Industries Association, in an interview last month with Federal News Radio.

The automatic, across-the-board spending cuts of $1.2 trillion over a decade are set take effect Jan. 2, unless Congress can reach a deal to avert the cuts.

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