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Hagel not so hot with defense contractors

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Defense Secretary Hagel’s standing with Republican and Democrat political insiders is OK. Hagel seems to be doing alright with the military community, however, contractors don’t give him high marks. Why? It is because Hagel is the man with the sequestration knife. His job is to shrink defense while making it more effective. When Republicans make a battle cry for smaller government, that strikes squarely in the defense contractor community. Excessive programs get cut.

Targets include:

  1. Older military platforms and systems who cost of life cycle extension exceed their worth.
  2. Excess military bases and operations for which the value of closing exceeds the cost of closing.
  3. Risky investments in systems and programs for which contractors have a history of failing to control costs and managing expectations.

It is a tough job being the executive in charge of shrinking and cost cutting.

“The fact that Hagel received negative marks from industry shouldn’t come as a surprise, said Mackenzie Eaglen, a fellow at the American Enterprise Institute.

“The first thing that anyone would have to question is whether industry would give low marks to anyone who had the job right now because they are the front man for implementing sequestration light,” she said.

“I don’t know that it’s personal. As modernization keeps getting squeezed further in the department, senior Pentagon officials are reaching out more to industry in the last 12 to 24 months,” Eaglen said. “The outreach is pretty healthy, but the news isn’t good, and that could be simply what industry is reacting to.”


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