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Comptroller: US Shutdown Cost DoD $600M in Productivity

Oct. 17, 2013 - 03:45AM   |  
US Defense Secretary Chuck Hagel delivers remarks concerning the government shutdown at a press conference at the Pentagon on Oct. 17.
US Defense Secretary Chuck Hagel delivers remarks concerning the government shutdown at a press conference at the Pentagon on Oct. 17. (Sgt. Aaron Hosutler/US Marine Corps)
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WASHINGTON — The US government shutdown cost the Defense Department at least $600 million in lost productivity, Pentagon Comptroller Robert Hale said Thursday.

The estimate is the result of 400,000 DoD civilians being furloughed for the first four days of the 16-day shutdown, Hale said at a briefing.

“There were a number of other costs where I can't put a number on them,” he said. “We built up interest payments because we were forced to pay vendors late. We had to cancel training classes, so we had to bring the people home on orders and then send them right back again. So there were a lot of costs of those sort. I can't quantify those, but it's at least the $600 million to start with in essentially lost productivity.”

Testing and other functions were delayed during the shutdown, but Hale predicts “we will be able to catch up reasonably quickly.”

Lawmakers passed a government-wide spending measure Wednesday which funds the government through January 15 and raises the debt limit through Feb. 7.

As part of the deal, sequestration spending caps still remain in place. That means DoD faces a $52 billion cut from its 2014 budget request.

[I]f we face budgets at the [Budget Control Act] cap level ... we're going to have to get smaller,” Hale said. “I can't tell you exactly how much. Yes, that will mean fewer civilians. We will try to avoid reductions in force. We'll keep them at an absolute minimum. We would look to do this, if we have to, through attrition, but, yeah, we're going to get smaller.”

DoD is currently operating under a continuing resolution that prohibits new programs from beginning.

“We're going to start executing at the continuing resolution level or a little lower, because of the enormous uncertainty and the possibility that sequestration in January,” Hale said.

Just days before the shutdown began, Hale said DoD would slow its 2014 spending.

Pentagon officials are building two 2015 budget proposals, one that builds on the 2014 proposal and another that takes sequestration into account.

“Well there are far-reaching changes,” Hale said when asked about the differences between the two budget proposals. “It shouldn't be surprising when you take about $50 billion in fiscal year '15.”

DoD will “be ready for a wide range of contingencies, because we know that's what we face,” he said.

Still furloughs, prompted by sequestration, three years of pay freezes and now the latest shutdown, have taken their toll on DoD’s civilian workforce, defense officials say.

“I don't think anyone questions that the uncertainty that shutting down the government and closing down people's jobs has brought a great amount of not only disruption to our government, to our country, but to their lives, to the civilian personnel whose lives have been disrupted by this particular shutdown,” Defense Secretary Chuck Hagel said at the same briefing.

Senior defense officials are now worried that low morale will lead to workers leaving government for the private sector.

“We won't be able to recruit good people,” Hagel said. “Good people will leave the government. They're not going to put up with this.”

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