BDA Executive Director Joe B. Montez said Tuesday afternoon that the decision for the extension came immediately after an executive session during which board members discussed the proposal.
The current lease, which was set to expire on Aug. 1, was extended until the end of this year. Also, Kay and Associates was given the option to use two, three-month extensions for next year.
The first extension, if agreed to by Kay, will expire on March 31, 2013. Then, if the company chooses to exercise the additional lease extension, it would continue until June 30.
Montez said employment at the hangar, warehouse and paint booth that Kay leases for the Sikorsky Aerospace Maintenance operation at the Chase Field Industrial and Airport Complex has been reduced in recent months to the point where between 60 and 70 personnel are working there.
The director said the operation has lost some contracts recently because of a reduction in U.S. Department of Defense activity.
Also, major cuts in national defense spending loom if lawmakers are unable to find other ways to reduce spending.
Without an agreement, automatic spending cuts will take place in January that could cut the DOD’s budget by $492 billion.
Under an agreement between lawmakers in Washington, D.C., if Congress fails to reduce overall federal spending by $1 trillion, an action called “sequestration” could result in automatic spending cuts.
Although lawmakers are saying they do not want to see defense spending reduced by a half a trillion dollars, it could easily happen if Congress is not able to agree on other spending cuts.
That could be devastating to the Kay and Sikorsky operations at Chase Field as well as other defense contractors across the nation.
“The board is pretty satisfied and we’re optimistic,” Montez said Tuesday. “We feel the numbers will increase in the future.”
Gary Kent is a reporter at the Bee-Picayune and can be reached at 358-2550, ext. 120, or at reporter@mySouTex.com.