Government Contractors

Dave Glantz, Director Research Services, Market Connections, Inc.

On Oct. 9, the Project on Government Oversight (POGO) blog posted an infographic and blog entry that they say “fight[s] against the myth of Pentagon spending as a job creator.” The post asserts that, based on historic data, sequestration cuts to Pentagon spending will not cause widespread job losses. The historic data they cite show a 3% reduction in the contracting workforce among the top 5 defense contractors from 2006-2011, a period in which those same contractors saw a 10% increase in contract dollars.

I take issue with the logic of the infographic’s argument.

That last five-year period (2006-2011) saw defense spending that covered a great many contracts, a lot of them associated with two major wars, including the longest war in US history (Afghanistan). Going forward, the next five-year period is likely to see fewer (planned) wars (we hope) and thus fewer, less expensive contracts.

Also, it stands to reason that over that very active five-year period of defense spending, the defense contractors themselves were able to identify efficiencies along the way that allowed them to complete their contracts with fewer personnel – I would imagine this to be the case for the longer term and more mature contracts especially.  In other words, like other industries, the contractors were able to raise more productivity per worker over time, and thus were able to shed some workers as playershad.com and when they saw fit.

But sequestration is supposed to hit contractors more suddenly, with immediate and indiscriminate program/budget cuts, with no advance notice of what exactly is to be cut or by how much. In many instances my guess is the contractor will not have the luxury of time to shed workers when and as they choose, and still remain profitable.  They may instead need to make that decision up-front, given the unpredictability of the environment and the conceivably reduced scope of any new programs that are approved or survive.

I don’t want to automatically take the side of the defense contractors, because even without sequestration they would have been aware (as we all are) that the winding down of two wars and a fiscally strapped federal government would lead to less business. Nor do I feel the Pentagon in particular is or should be seen as a Job Creator, because its budget (and consequent freedom to issue contracts) is authorized by Congress.

It is true that if the Pentagon suddenly reduces contracts by ten percent, then that action cannot help but be the impetus for job losses to the firms that supply the Pentagon with products and services. Indeed, the prospect of a big and sudden cut to budgets in ANY industry is likely to lead to equally immediate job losses. That’s very different from industry’s shedding jobs due to productivity gains over the course of many contracts from 2006-2011, an era of unprecedented defense spending.

At the same time, I don’t think it’s fair to label the Pentagon as a Job Destroyer. Like the contractors, the Pentagon is also looking for efficiencies over time, and it is only reasonable to expect (as the contractors do) that more can be built by fewer hands.  From that standpoint, it really isn’t in the interests of the Pentagon to encourage more hiring in the first place if fewer hands can do the work.

If anything, the label of Job Destroyer belongs to Congress for fashioning that 10% reduction as a massive, sudden and ill-conceived action that prevents the Pentagon itself from allocating funds as it sees fit to maximize the cost efficiencies of the programs it runs, and to cut programs it doesn’t need.

Lockheed Martin wanted to establish its Cyber Security Alliance as a thought leader in cloud computing and cyber security, while measuring perceptions of the company and other cyber security solution providers.

Market Connections conducted an independent study of U.S. government federal civilian, defense, military and intelligence agency IT decision makers to evaluate awareness and attitudes around cloud computing and cyber security.

Together, Lockheed Martin and Market Connections presented the findings to the media and government agency decision-makers on behalf of the 14 Cyber Security Alliance partners through a custom white paper and related webinar.

Key Findings

The study revealed that understanding of cloud computing is not widespread among professionals who will implement, use, secure and manage cloud computing, even though it is being touted as a leading IT trend.

Study findings illustrate there is a lack of consensus about the definitions of cyber security and cloud computing among IT professionals. Implementation and management of cloud computing platforms within federal agencies will require crossfunctional discussion between IT policy and implementation professionals.

The study revealed that understanding of cloud computing is not widespread among professionals who will implement, use, secure and manage cloud computing, even though it is being touted as a leading IT trend. Study findings illustrate there is a lack of consensus about the definitions of cyber security and cloud computing among IT professionals.

Implementation and management of cloud computing platforms within federal agencies will require crossfunctional discussion between IT policy and implementation professionals.

Survey Insights

Cloud computing has low levels of awareness, trust and adoption among IT decision makers in the U.S. defense/military and federal government. Even professionals familiar with cloud computing, who may be responsible for securing enterprise systems and information, lack awareness and trust.

  • Government agencies value control and access, regardless of whether the cloud offering is public or private.
  • While cloud adoption is expected to grow, respondents’ inexperience with cloud computing, security concerns and uncertainty about governance could make it difficult for organizations to effectively implement cloud computing or realize full value from it.
  • Although survey data reflect barriers to adoption of cloud, adoption rates and user experiences show that barriers can be overcome. For example, respondents who know cloud computing best trust it most; those familiar with cloud computing tend to implement it; and those who implement cloud computing expand their use by accessing multiple applications through the cloud.

Results

Lockheed Martin’s Information Systems & Global Solutions (IS&GS) communications team and Cyber Security Alliance leveraged the research findings and white paper to strategically position the Alliance as a leader in cyber security solutions. Outcomes included:

  • Media hits in leading government-focused technology publications such as Government Computer News, Federal News Radio Fed Cloud Blog, GovConWire, GovCon Exec, and Fox News Radio. Media tracking showed high levels of visibility and engagement with the white paper showcasing research findings.
  • 87 webinar attendees
  • More than 726,000 online impressions delivering more than 700 postwebinar downloads

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