A good thing, or a bad thing ?
Speaking Monday at the Washington-based Center for Strategic and International Studies (CSIS), a panel of experts responded to the findings of a report quantifying how defense spending cuts, enacted by the Budget Control Act of 2011, has caused a dramatic number of defense industry suppliers to leave the market while chilling industry’s research and development activities.
“Though the defense budget had been declining in the years leading up to sequestration in FY 2013, the enactment of sequestration and budget caps marked a severe market shock that had a considerable impact on the defense industry,” said the report, co-produced by CSIS and the Aerospace Industries Association, and released in late December.
With less defense spending, the CSIS report found fewer contracts were being awarded. Before the Budget Control Act of 2011 fully took effect, the average annual number of DoD contract obligations in fiscal years 2011 and 2012 only dipped by five percent when compared to fiscal years 2009 and 2010. After 2013, defense obligations dropped by 23 percent.