Current DOD contracts will not be cut for savings
Cuts will come from unexercised options, not making new awards
- By Washington Technology staff
- Feb 22, 2013
The Defense Department will not cancel contracts if sequestration happens, but will instead refrain from funding contract options and from awarding new contracts, according to FCW.com.
Even with employee furloughs, the department will continue making payments on current contracts on time, a top Defense Department official said. These furloughs could save the department between $4 billion and $5 billion, but since the department needs to cut a total of $45 billion to $46 billion if sequestration occurs, most of the cuts will have to be taken in other areas, FCW said.
“There will be very substantial effects on the private sector as well,” said Defense Department Controller Robert Hale as saying. The department issued a notice on Feb. 20, which served to begin a 45-day countdown to when the furloughs can begin. This will be followed by a 30-day notification, sent to all employees who may face furlough, in March.