Budget churn keeps pentagon suppliers on edge.

• Author: Erwin, Sandra I.
• Position: Defense Insider

With no sign that Congress is prepared to return to a "normal" budgeting process any time soon and anxiety about impending cuts gripping the Pentagon, contractors are resigned to the idea that business will be anything but usual for the foreseeable future.

The Pentagon is far from being cash strapped--its budget has doubled over the past decade, reaching nearly $700 billion this year and is expected to drop only modestly in the next two to three years. But incertitude about where the reductions will fall are having paralyzing effects.

"It's really hard to plan your business when your customer says, 'We have no money, we expect to get the money, but we don't know when," says George Eanes, vice president of business development at Modus Operandi, a high-tech software supplier. The congressional gridlock that has kept federal agencies on...