Defense Contract Awards Down 52 Percent in April

Sequestration is weighing heavily on acquisition managers, consultant says.

Budget cuts from sequestration reduced the number of contracts awarded by the Defense Department in April, Bloomberg Government reported.

Only $19 billion in contracts were awarded by the Defense Department last month, which is a 52 percent drop from the $39.4 billion awarded in March.  April’s total was also 34 percent lower than the $28.8 billion average monthly contract amount in the year ending March 31, according to Bloomberg’s analysis.

Larry Allen, the president of consulting firm Allen Federal Business Partners, told Bloomberg that acquisition officials at Defense face a “tremendous sense of pressure not to spend right now.” He also said the prospect of civilian furloughs at Defense might be preventing the delivery of more awards.

Topping out the list in April was General Dynamics Corp., which led a group of eight companies to win a $6.9 billion network equipment contract. General Dynamics Chairman and CEO Phebe Novakovic recently told participants at an earnings conference call that the company “did not see sequester as a significant threat” for its 2013 forecast.

Other major defense contractors including Boeing Co. and Northrop Grumman Corp. have largely shrugged off the across-the-board budget cuts in their 2013 forecasts. Only Lockheed Martin Corp. said that sequestration would mean that its 2013 revenue forecast would be at the “lower-end” of originally planned estimates.

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