Sequestration's impact already here

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.