Congress is currently wrestling with a March 1 deadline for mandatory cuts if the House and Senate cannot come up with an alternative spending plan for the 2013 budget. In a meeting with the Journal’s editorial board, Hommert said major uncertainties remain about how much of a budget cut Sandia might take and what impact it might have on Albuquerque’s largest employer.
But recognizing the inevitability of cuts of some kind, Sandia held current year spending down, anticipating reductions of 3 to 5 percent, Hommert said. If the cuts that result from current deliberations are deeper than anticipated, Sandia will deal with the shortfall by cutting back its hiring program.
Reductions in force or furloughs are unlikely, Hommert said.
“We do not expect to have to do that,” he said.
Legislation passed in 2011 to try to reduce the federal deficit called for mandatory cuts of 8.4 percent in nondefense spending and 7.5 percent in defense spending if Congress failed to come up with an alternative plan by Jan. 1, 2013. That deadline is now March 1.
Sandia managers set up their $2.5 billion 2013 budget with the expectation that some sort of budget cut was likely, Hommert said.
But the mix of defense and non-defense spending at Sandia makes it even more complicated when anticipating how big the budget cuts here might be, Hommert said, leaving a great deal of uncertainty.
“That’s the hardest aspect by far of this environment we find ourselves in,” Hommert said.
Whatever cuts happen at Sandia under what is called “sequestration” would be a portion of $1.2 trillion in cuts over the next 10 years being contemplated by the federal government.
Located at Kirtland Air Force Base on Albuquerque’s southern border, Sandia employs from 10,500 to 11,000 people, and that number has been stable for a number of years.
Sandia’s primary mission is design, manufacture and maintenance of parts for U.S. nuclear weapons, but in the past decade the research center has diversified, with work outside the nuclear weapons program now making up about half of Sandia’s budget.
In addition to direct employment, Sandia’s spending on outside contracting is likely to remain relatively stable, Hommert said. In 2011, Sandia spent $387 million with New Mexico contractors. That rose to $402 million in 2012, and is not expected to drop this year, he said.
On other topics, Hommert said:
⋄ Sandia is not only facing budget uncertainty, but the uncertainty caused by the current nuclear deterrence policy debate, including possible nuclear stockpile reductions and what role nuclear weapons will play in the long run.
⋄ New Mexico’s universities continue to produce quality scientists and engineers, especially those with master’s degrees, to fill Sandia’s job pipeline.
⋄ Sandia remains in a wait-and-see mode regarding the status of its contract management. Lockheed-Martin currently manages Sandia for the federal government, but its contract expires at the end of September and the government has announced plans to open the contract to other bidders.
Lockheed-Martin has said it will bid, and that Hommert will head up the effort to win a new contract, but a federal decision on when to start the bidding has been repeatedly delayed.
— This article appeared on page A1 of the Albuquerque Journal