Military Contractors Brace for Government Spending Cuts

Military Contractors Brace for Government Spending Cuts

Despite talk of a military buildup, the Trump administration may severely limit funds available for private military contractors.

That is according to the most recent Vision Federal Market Forecast, which is based on interviews with government officials, financial analysts, and policy experts. Since much of the work was done prior to the November election, the results are not necessarily specific to President Donald Trump’s administration. One industry leader remarked that prospects for increased spending on military contractors are “pretty slim,” due to other priorities, specifically those involving upkeep and maintenance to combat the wear-and-tear brought on by fighting two wars. “The economy is going to have to improve before we’re really going to be able to have a significant number of dollars to do the things that the president-elect would like to do with the Defense Department,” he opined in November 2016. Moreover, the defense budget must make room for planned procurement projects, such as the KC-46 tanker, F-35 joint strike fighter, and B-21 stealth bomber.

However, the President has proposed increasing the number of troops in the Marine Corps and Army, and additional deployments could mean additional work for private contractors. Additionally, because of the DoD’s “third offset” plan to make U.S. forces technologically superior to their opponents, research and development spending should continue unabated.

What Contractors Do

Despite the popular myth that most private military contractors are “door-breakers” who routinely provoke armed conflicts with hostile militants, most contractors have much more mundane duties. Many of them have a specialized skill set that regular servicemembers simply do not possess. Partially to address this deficiency, the Air Force recently created the NCST (Nerd Cyber Swat Team) which, according to Air Force Secretary Deborah Lee James, is “a group of extremely talented engineers with skills honed in the private sector who today have come into government for a brief period of time. . .[to help solve] some big problems.” Apropos of nothing, only the military could come up with an acronym and name like “NCST”.

However, the NCST is not “home grown,” because the cost of identifying raw talent and training these individuals to perform non-military tasks is not an investment that the budget-conscious DoD wants to make. It is much cheaper to simply hire individuals from the private sector, or former servicemembers in the case of military contractors, to fill these roles. So, in addition to technology and communications specialists, private contractors are interpreters, mechanics, and other positions that are technically non-combatant.

Of course, there are many armed contractors who serve alongside regular servicemembers, mostly in escort and security details. Basically, these individuals free up regular servicemembers for other tasks. That is one reason private contractors are not mercenaries; their offensive role, at least in the United States armed services and State Department, is almost nonexistent.

Where They Work

Since the aftermath of 9/11 and the onset of the Global War on Terrorism, most contractors have served in the MENA (Middle East and North Africa) region, and specifically in Afghanistan and Iraq. Even though U.S. forces have almost completely withdrawn from these areas, the contractor contingent remains relatively high. Some other contractor locations include:

  • Diego Garcia: This isolated atoll in the south Indian Ocean is home to some of the most cutting-edge weapons in the world, and according to some, also a place where the CIA interrogates terrorism suspects. Almost everything comes in and goes out via large cargo ships, so there is a great need for longshoremen and other dock workers in addition to traditional military contractors.
  • Japan: There is perpetual talk of limiting or ending the U.S. military presence in this country, but with wildcard North Korea and increasingly-belligerent China only a stone’s throw away, the island nation will probably make a place for servicemembers and contractors for years to come.
  • Haiti: It seems like a lifetime ago that a major earthquake hit this nation, killing thousands and displacing tens of thousands, but government corruption and red tape hampered rebuilding efforts for the longest time. As a result, there is still much work to be done, and military contractors are doing much of it.

Other contractors serve at U.S. bases in Guam, the Philippines, Kuwait, Cuba, and elsewhere around the country. Additionally, contractors provide security services at many U.S. embassies and other State Department facilities.

What Happens When They are Injured

Injured servicemembers may turn to the VA for lifelong medical assistance, even after they leave active duty. Thanks to the Defense Base Act, injured contractors have access to similar benefits. The primary eligibility requirements are:

  • Service in a War Zone: As this term is defined, any U.S. military installation outside the 50 states is in a war zone. Moreover, some contractors working for some foreign governments are also eligible for DBA benefits.
  • Job-Related Injury: According to the Supreme Court, victims must only show a relationship between their injuries and their job duties, as the incident need not occur while the victims are “on the clock” and at a certain place.

For more information about DBA benefits, contact Barnett, Lerner, Karsen & Frankel.