Sequestration's impact already here

Agencies, contractors feel the pain even if it never happens

Two things in the government marketplace that are highly appreciated are consistency and predictability, which is unfortunate because “those are the two things in the shortest supply right now,” said Alan Chvotkin, Professional Services Council executive vice president and counsel.

“Budget uncertainty, coupled with the threat of sequestration, are actually having significant impact on federal agencies and on many companies, even if we never get to sequestration,” he said, kicking off Deltek’s FedFocus 2013 event this morning.

Some agencies are spending money a little quicker, trying to get ahead of the cuts, but others are conserving their cash.

The problem is, Chvotkin said, we’re two weeks into the lame duck session, which has so far made little effort to deal with the time-sensitive issue at hand. Delaying sequestration is just as much an option right now as it’s ever been, but while this might be acceptable politically, it does little to help the companies that will be impacted by it.

Congress has passed a continuing resolution to fund the government through March 27, 2013; however, “the reality is, for the agencies, that if it’s anything short of 12 months, it’s a problem, and it creates problems for the acquisition cycle” and for contractors, he said.

Another problem is the misconception of the sequestration and the fiscal cliff. “The thought process [is] if we don’t solve anything by Jan. 1, the world stops, and the government will stop contracting. That’s not the case,” he said.

But it does complicate things, especially since there is still very little known on what’s actually going happen if sequestration kicks in.

“One of the holy grails” of the budget control act, Chvotkin said, is defining what a program, project or activity is. No one seems to have the answer, he said.

About the Author

Mark Hoover is a staff writer with Washington Technology. You can contact him at, or connect with him on Twitter at @mhooverWT.

Reader Comments

Wed, Dec 5, 2012 Bill Blumberg

Sequestration or not, The Government's financial position represents a tight market for contractors for the next several years.

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

What is your e-mail address?

My e-mail address is:

Do you have a password?

Forgot your password? Click here
contracts DB


  • Dive into our Contract Award database

    In an exclusive for WT Insider members, we are collecting all of the contract awards we cover into a database that you can sort by contractor, agency, value and other parameters. You can also download it into a spreadsheet. Read More

  • Is SBA MIA on contractor fraud? Nick Wakeman

    Editor Nick Wakeman explores the puzzle of why SBA has been so silent on the latest contractor fraud scandal when it has been so quick to act in other cases. Read More


  • How Do You Support the Project Lifecycle?

    How do best-in-class project-based companies create and actively mature successful organizations? They find the right mix of people, processes and tools that enable them to effectively manage the project lifecycle. REGISTER for this webinar to hear how properly managing the cycle of capture, bid, accounting, execution, IPM and analysis will allow you to better manage your programs to stay on scope, schedule and budget. Learn More!

  • Sequestration, LPTA and the Top 100

    Join Washington Technology’s Editor-in-Chief Nick Wakeman as he analyzes the annual Top 100 list and reveals critical insights into how market trends have impacted its composition. You'll learn what movements of individual companies means and how the market overall is being impacted by the current budget environment, how the Top 100 rankings reflect the major trends in the market today and how the biggest companies in the market are adapting to today’s competitive environment. Learn More!