Small business should feel first pains of sequestration

Cascade effect will flow down to primes and subs, DOD says

Military officials are warning that small businesses may feel the first effects of sequestration as the services cut their operations and management budgets.

FCW is reporting that Lt. Gen. Charles Davis, an Air Force acquisition official told Congress that sequestration will cascade down through primes and subs.

He also warned of the effects of the continuing resolution, set to expire later in March.

"The absence of a final fiscal 2013 appropriations bill thrusts each military service into a planning purgatory of sorts, clouding near- and long-term fiscal programming with a fog of ambiguity," he told the House Armed Services Committee's Tactical Air and Land Forces Subcommittee.

Large businesses have the resources to weather sequestration but small firms do not, Heidi Shyu, assistant secretary of the Army for acquisition told the panel.

In other sequestration news, the Office of Management and Budget’s Danny Werfel sent a memo to agency heads with updated guidance on how to handle cuts, FCW reported.

He said agencies can expect more scrutiny of spending on funds from sequestered accounts particularly for new hires, awards to staff and new obligations for training, conferences and travel.

Werfel said agencies should try to ensure that contract actions are "cost-effective and minimize negative impact on the agency's mission to the extent practicable." Overall, agencies should consider new contracts only when they support high-priority efforts, he added.

FCW also offers an agency by agency breakdown of sequestration's impact.

Reader Comments

Fri, Mar 1, 2013

So glen, what waste do you want to cut

Fri, Mar 1, 2013

Let's see if the federal government begins to increase small business requirements on new contracts in order to protect small business.

Fri, Mar 1, 2013 Glenn WV

The largest threat to our national security is the exploding national debt. We can cut the waste and preserve the product.

Fri, Mar 1, 2013

Large Primes have already started some months ago to insource the subcontract work from small businesses to pump up their work share and cover their overhead and indirect costs.

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