Sequestration and Major Program Changes
As the Federal Budget changes and is whittled down, there will obviously be some programs that will be cut and or eliminated. It has been widely publicized that non-essential travel has been greatly reduced within the government to help reduce costs. Even the Blue Angels flight team was grounded for a period of time during 2013 (They will be back in the air for the upcoming fiscal year). I thought it might be worthwhile to look at some of the programs that we have heard of that could either be casualties or might be good candidates to survive.
Let's look first at some of the casualties. I think the one we have all seen something on recently is the F-35 jet for the military. Originally this jet was the new generation fighter aircraft that would replace an aging inventory of fighters and replace them with state of the art aircraft. Originally it was forecast that over 3,000 aircraft would be made with a large number going to international partners. There were originally 3 versions including a vertical take-off option. Cost over-runs during the program (that started in the 1990's) and now Sequestration and budget cuts have led to discussion of canceling the program. Many helicopter programs are under the same scrutiny and possible cancellation. The RAH-64 Comanche helicopter was canceled in 2004 because it was too expensive to develop the leading edge technology incorporated into the design. Other helicopter programs are currently under the gun as unmanned aircraft become more and more useful. The budget cuts are the final straw to break many of these programs. Other programs that have been mentioned as being vulnerable include:
- Logistics support
- Troop equipment
- Transport and/or tactical vehicles
- Aircraft carriers
- Nuclear bombers
- Strategic missile defense
What is the good news on this front? There are programs out there that are of interest to the government. Certainly energy programs are of interest, especially solar and wind energy programs. Interest from the government in nuclear energy, both fission and fusion, is again growing. Certain topics on medical research and health care are of interest to the government. One of the largest areas of growth might be in the concern for cyber security systems. This spreads across many departments within the government. As we mentioned above, unmanned vehicles (air, land and sea) are very popular with the Department of Defense right now. Some other areas that could be of growing interest include:
- Modeling and simulation
- IT services
- Attack Submarines
- Data Analytics
- Maintenance - make assets last longer
I know some of this is rather general in nature but I thought it might be worth talking about positive ways to think of what the government will be buying instead of continuing the negative banter about budget reductions. Yes, programs will be cut and dwindling. The nimble business will look for growing opportunities to replace those that go away.