The specter of sequestration loomed large over the 2012 Dayton Small Business Defense Procurement Summit on August 29.
The possibility of automatic, across-the-board budget cuts to the Department of Defense was a hot topic as entrepreneurs and DoD officials gathered at the Dayton Convention Center to discuss how small businesses can land contracts with the U.S. Air Force and other military departments.
The Office of Management and Budget is charged with making the cuts by Jan. 2. But officials warned that preparation for possible cuts is happening now. And Frank Kendall, undersecretary of defense, acquisition, technology & logistics, warned further that it's small businesses that could especially suffer. He expects program managers to examine spending in their programs line item by line item, and they will be more likely to spare prime contractors -- larger businesses -- from ruinous cuts.
"Where they are going to go to find savings is the small business part," Kendall said.
The expectation is that the presidential race has all but ensured that there will be no budget deal before the Nov. 6 election, Kendall said. Perhaps a "lame-duck" Congress will postpone expected cuts after the election, he added.
"This is one of those cases where doing nothing doesn't work very well," Kendall said.
If an accord is not reached, sequestration will mean $500 billion in defense and non-defense cuts over 10 years beginning early in 2013.
Both parties agreed to sequestration in last year's debt ceiling agreement.
Kendall marveled at the fact that everyone agrees that sequestration is a bad idea, and yet government leaders haven't yet dealt with it. "It was set up to be so singularly stupid that no one would ever do it," he said.
Sequestration concerns are acute in the Dayton area because nearby Wright-Patterson Air Force Base is Ohio's largest single-site employer, with about 27,000 military, civilian and contractor employees.
The federal government has reached its target of spending 23 percent of all its contracting dollars with small businesses only three times in the past 12 years, according to CNN Money. But speakers told listeners Wednesday that they want small businesses to work with the government. Companies were encouraged to respond to federal "sources sought" notices and requests for proposals to small businesses.
"We really, really, really want to know that you're out there," said Patrick Dulin, deputy commander of the Defense Logistics Agency Energy.
Businesses were encouraged also to go to ccr.gov and fbo.gov to learn about opportunities to do business with the federal government.
In general, defense budgets will be tighter and spending may be flatter in coming years, speakers said.
"There is every indication there are going to be tremendous pressures in the future," said Steve Butler, executive director of Air Force Materiel Command, headquartered at Wright-Patterson.
"It's going to be tough," warned Joseph McDade, director of the Air Force Office of Small Business Programs.