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Wednesday, May 23, 2018
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Defense spending in Florida down 20 percent since 2010

With the war in Iraq over, the war in Afghanistan winding down, and downward spending pressures on the Pentagon, the Florida defense industry is feeling the squeeze.

Defense spending in the state dropped by about $3 billion over three years, according to the Florida Defense Contractors Association. That represents about a 20 percent cut since 2010, when more than $14 billion in military contracts were awarded. The association has not yet crunched the numbers for 2014.

Last year, that translated into about 1,500 job losses statewide, according to association president Joe Marino.

And that is just from companies of 100 or more, said Marino.

The real affect could be even deeper, he said, because smaller companies do not have to file notices with the Department of Economic Opportunity, which the association used to gather its figures.

“This is the dual side of the sword,” said Marino. “The drawdown of overseas conflicts is No. 1 and the uncertainty around sequestration, No. 2.”

The $11 billion in contracts last year “gets us below where we were in the 2008-2009 time frame,” said Marino.

The association is working to break the numbers down by county and should have that information in the next week or so, Marino said.

Given past data and current trend lines, the news is not expected to be good. A study conducted last year for the Florida Defense Alliance projected a loss of 13,000 defense-related jobs in the Tampa area by 2015 “as the result of defense activities.” That represents a 9 percent drop from 141,700 jobs in the region in 2011, according to the Florida Defense Industry Economic Impact Analysis report.

One immediate effect locally is that about 1,000 employees of Tampa area defense contractors are facing layoffs or pay cuts as the war in Afghanistan winds down,

“There will be significant cuts,” said Greg Celestan, chairman and chief executive officer of Celestar Corp., in an interview last month. His company is one of several companies that will be affected by a reduction in spending that will come with the end of the war in Afghanistan.

“A number of companies are having meetings with existing employees, telling them not to take out any serious financial commitments in the near future.”

Hundreds of employees, “even up to 1,000,” will face layoffs or pay cuts of as much as 20 to 30 percent, said Celestan.

Overall, the number of Department of Defense contractor personnel in the U.S. Central Command region dropped by about 26 percent from October to last month, according to a Centcom report. The region consists of 20 countries including Afghanistan, Egypt, Iran, Iraq, Syria and Yemen.

On April 30, Leidos, a Reston, Virginia-based company which provides professional, scientific and technical support services to Centcom’s Joint Intelligence Operations Center at MacDill Air Force Base, issued a Warn Notice with the Florida Department of Economic Opportunity saying it may lay off 93 workers in June.

Leidos submitted a proposal for a follow-on contract for Centcom, said spokeswoman Jennifer Gephart, and the layoffs will take place if the company does not win its bid.

That award has not been announced and the government is extending the current contract to the end of July, company spokeswoman Tia Howard said Wednesday.

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