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1 posted on 02/22/2013 10:48:27 PM PST by ExxonPatrolUs
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To: ExxonPatrolUs

Reducing the Pentagon’s budget has much more impact on national security than the article implies. Let’s reduce the entire budget debate to one small made-up example program. The SMACKU program was awarded to Acme Arms. On this program Acme Arms employees 30 engineers and a 30 other support technicians and production people. Acme has let secondary contracts to subcontractors. Everything is on schedule. The amount of money spent, the burn rate, on the SMACKU is $2 million per month. Now sequestration comes along and the Pentagon instructs Acme Arms to reduce the burn rate to $1.3 million per month and stretch the schedule out.

The impact of this change is far reaching. Some of the subcontractors, who are small and ramped up and maybe invested their own money so they could compete, go out of business. The impact of this is a huge (eventual) cost increase. Also, there may be penalties that Acme has to pay which further increases the impact and robs additional funding from the project.

Meanwhile Acme has informed its employees. Several people retire early. Those people and their expertise and knowledge about SMACKU are no longer available. Some employees get laid off and move to take other jobs elsewhere. Some of the people that Acme had targeted as key players that would not be laid off decided to leave on their own and perhaps start their own business. Almost none of the talent lost will be available when and if the military wants to restart SMACKU. That means that SMACKU restarts almost from scratch.

A program that was on target to deploy fielded hardware in two years may be delayed for five years and end up costing two to six times more due to this funding perturbation. Now, take this scenario and multiply it by almost all of the high tech programs the military has. The impact of sequestration is real for the military and may affect military capabilities for the next 10 years.


2 posted on 02/23/2013 4:58:35 AM PST by Gen.Blather
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