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Army fights cash crunch, cuts spending.

The Army has frozen all new contract awards and task orders that are not related to war-fighting, as it struggles to cope with the escalating cost of the conflicts in Iraq and Afghanistan.

Spending restrictions were originally imposed while the Defense Department waited for Congress to pass an emergency supplemental appropriations bill. But in an announcement July 19, the Army said the restrictions will continue in force into the new fiscal year that begins in October.

Among other belt-tightening orders:

* Limiting supply purchases to critical wartime needs only;

* a freeze on all non-mission-essential travel;

* stopping shipment of goods, unless necessary to support deployed units or those preparing to deploy;

* a hiring freeze Noun 1. hiring freeze - a freeze on hiring
freeze - fixing (of prices or wages etc) at a particular level; "a freeze on hiring"
 on civilian employees;

* laying off temporary employees; and

* restrictions on the use of government credit cards.

"The Army also began and continues to plan for the release of selected service-contract employees," the statement said.

The cuts are hitting services at domestic Army installations, the Christian Science Christian Science, religion founded upon principles of divine healing and laws expressed in the acts and sayings of Jesus, as discovered and set forth by Mary Baker Eddy and practiced by the Church of Christ, Scientist.  Monitor reported. Fort Carson Fort Carson is a United States Army installation and a Census Designated Place located immediately south of Colorado Springs in El Paso County, Colorado, United States and just north of Pueblo, Colorado in Pueblo County Colorado. , CO, has closed two dining halls. Fort Sam Houston Fort Sam Houston, U.S. army base, 3,300 acres (1,335 hectares), S Tex., in San Antonio; headquarters of the Fifth Army. San Antonio, long a military center, donated land in 1870 for the site of a permanent military post that was constructed from 1876 to 1890 and  in San Antonio San Antonio (săn ăntō`nēō, əntōn`), city (1990 pop. 935,933), seat of Bexar co., S central Tex., at the source of the San Antonio River; inc. 1837.  hasn't paid its utility bill since March. Fort Leonard Wood Fort Leonard Wood, U.S. army post, 71,000 acres (28,700 hectares), S central Mo.; est. 1940. It is one of the largest basic-training centers in the United States and also provides training for army engineers. , MO, has money for its payroll and utilities, and nothing else, the paper reported.

In addition to the cost of keeping troops in the field, Army Chief of Staff Gen. Peter Schoomaker General Peter J. Schoomaker (b. February 12, 1946) was the 35th Chief of Staff of the United States Army, serving from August 1, 2003 to April 10, 2007, when the Army announced he would be replaced by General George Casey; Schoomaker will retire from the Army for the second time  has warned of the growing price tag for repairing and replacing tanks, helicopters, trucks and other equipment that has been damaged, destroyed or simply worn out in the war zones.

The Army's 2006 budget is $98 billion. President Bush has requested $111 billion for 2007, but the Army statement said it anticipates Congress may cut that.

Three- and four-star commanders were directed to exercise greater control over spending. "The Army must streamline or eliminate redundancies to free financial and human resources that can then be redirected to its core war-fighting mission," the statement said.

The Army said it has already reduced monthly contract obligations by 11% and reduced supply obligations by 8%, but it provided no estimate of how much money it hopes to save overall.
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Title Annotation:Business Issues; rules on defense contracts
Publication:Set-Aside Alert
Geographic Code:1USA
Date:Jul 28, 2006
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