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Small Defense Contractors Vie For Shrinking Budget Pie

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Aired 8/24/11

Small defense contractors at a Navy conference in San Diego hope their agility will grow their share of a shrinking DOD budget pie.

More than 1,000 defense industry contractors from around the country are attending the Navy’s Gold Coast Conference in San Diego this week.

Jim Lasswell is small business chair of San Diego’s Defense Industry Association, which co-sponsored the conference, and president of Indus Technologies, a business he said has grown 15 percent a year recently. Lasswell said the buzz this year is about cloud computing and ways to protect top security information.

The Navy's Gold Coast Conference 2011 in San Diego
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Above: The Navy's Gold Coast Conference 2011 in San Diego

“A year ago, if you mentioned the word ‘cloud,’ they were thinking you were talking about weather, and now we’re talking about this amazing network of places to store data," said Lasswell. "This is a great time for people who are able to innovate and do things quickly - this favors the small business solution.”

Lasswell said even as the defense budget shrinks, small businesses have an advantage because they can adapt fast to changing needs. He estimates about 75 small businesses in San Diego have prime contracts directly with the DOD , and many more have subcontracts with big defense contractors, like General Atomics and Northrup Grumman.

The Department of Defense spent more than $10 billion on defense contracts in San Diego in 2009, the latest information available.

Representatives from the Navy’s Facilities Engineering Command, or NAVFAC, said they anticipate cuts of 10 percent or more next year, which will affect the number of construction contracts available. The Navy and Marine Corps in San Diego have seen an unprecedented building boom in the past three years, which has poured billions into the local economy.

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