Could DoD cuts benefit small businesses?

Wednesday - 1/18/2012, 6:09pm EST

Steve Krause, principal, Catalyst Partners

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Ever since a revised Defense Department strategy with the promise of deep future cuts was unveiled earlier this month, some observers of the contracting sphere have worried about the effect on small business.

But Steve Krause, a principal at Catalyst Partners, argues that it could turn out to be just the opposite.

In a post on Security Debrief, Krause, a former marketing executive at Boeing and McDonnell Douglas, wrote that the steep cuts could actually bring opportunities for smaller companies.

"This new normal can spell terrific opportunity for firms that are willing to shed comfortable habits and plunge into the maelstrom with courage," Krause wrote in the post.

That's because new DoD programs could be smaller and of shorter duration than previous ones, which plays to smaller companies' strengths.

"These companies that have traditionally prospered in the second, third and lower tiers of the U.S. government procurement system may find themselves bidding and performing as prime contractors," Krause wrote.