Army contract spending may drop $5 billion in 2015

ID=24896639The Army may spend up to $5 billion less on goods, services and equipment in fiscal 2015 than it did last, year, according to a top Army official.

The Army spent about $74.3 billion on contracts in fiscal 2014, but its fiscal 2015 contract spending will be $69 billion to $74 billion, Harry Hallock, deputy assistant secretary for procurement at the Army, told Federal Times March 16.

Even with a $5 billion drop in contract spending it would not fall as far as it did from fiscal 2013 to 2014, when it dropped 17 percent — from 87.3 billion to $74.3 billion.

Hallock said while fiscal 2015 might see some leveling off, Army contract spending has been falling every year since fiscal 2012. But the real concern within the Army is the automatic budget caps passed by Congress known as sequestration.

"What we are really worried about of course with sequestration is 2016, when it will fall off the cliff," Hallock said. He would not speculate on how much of a drop that would entail for the Army.

Sequestration placed budget caps on total Defense and non-defense spending, while legislation congress passed in 2013 lifted those caps through fiscal 2015. But the cuts will return in force in fiscal 2016 unless Congress acts to pass legislation.

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