Analyst: Obama's FY13 Budget would mean 8 Percent Dip in Contract Spending

March 27, 2012

Federal agencies plan to reduce contract spending by $60 billion next year, according to an analysis of President Obama's 2013 budget plan by the market research firm Deltek.

Agencies included more than $700 billion in their 2013 budget requests for products and services that contractors will likely provide, which is about 8 percent below the $768 billion in contract spending that agencies budgeted for this year, Ray Bjorklund, Deltek's chief knowledge officer, said at the firm's annual budget outlook event Tuesday.

The biggest hit to contract spending is expected in aerospace and defense programs, where agencies cut about $40 billion — or 21 percent — for a contract spending projection of $148 billion in 2013, according to Bjorklund. The Army's budget will be hit the hardest: Contract spending is projected to drop by $14 billion, or 38 percent, from this year's level. 

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