Budget Cuts Would Hit Contractors Hard

Photograph by Mike Fuentes/Bloomberg

Lockheed Martin Corp.'s F-16 Fighting Falcon jet during a ceremony to commemorate the 4,500th delivery of the plane.

Government is more reliant than ever on private-sector contractors, a Bloomberg Government Study ranking the top 200 federal suppliers says.

Downsizing in the 1990s cost hundreds of thousands of federal employees their jobs, but if Congress and the administration let automatic budget cuts take effect next year, then private-sector contract employees will bear the brunt this time around.

That will also make competition for the remaining federal dollars fiercer than ever. “A shrinking federal budget means that contractors will have to take market share from other contractors to grow,” said Bloomberg Government analyst Brian Friel, author of the study. “Companies can use these rankings to identify potential customers — federal agencies — and the competitors they’ll face off with for business with those customers.”

For now, it’s still lonely at the top for Lockheed Martin. Its $42.9 billion in government contracts last year was nearly double that of second-place Boeing.

What do you think about this article? Comment below!