Budget instability impacts defense contractors’ ability to plan, particularly when it comes to technical workforce management, Air Force Chief of Staff Gen. David Goldfein told lawmakers Thursday. “They’ve got to keep a certain amount of that workforce engaged over time, and so then when I go to them with one-year budgets and tell them my procurement quantities now are going to be here and then the next year, because of trades, they’re going to be down here, and I go jack them around, back and forth, it causes an incredible challenge for industry to be able to sustain their workforce that we need,” Goldfein said while testifying before the Senate Armed Services Committee. “So everything that we deal with in terms of unstable budget, and one-year budgets, actually gets accelerated into industry as well.” Goldfein said the Air Force relies on industry partners to support acquisition programs with research and development. “This all adds up to an increased risk,” Goldfein said. (See also: R&D Dollars Drop for Major Contractors)
When the Air Force sets a new program baseline for the B-52 re-engining this fall, there will be “some” cost increase, because the project wasn't previously fully funded, and the Air Force has a better handle on actual supplier costs and knowledge from ground testing, program officials said.