Pain of sequestration still being felt
As 2018 comes rolling to its end, my thoughts have turned back several times to earlier this decade when the market was gripped by fears over sequestration.
They say journalism is the first draft of history. Back in 2012 and 2013, sequestration had us writing blogs and other commentaries with headlines such as “Eight sequester cuts worth watching,” “Sequestration failure brings mixed bag,” and “Why the government isn’t ready for sequestration.”
Sequestration laws are still on the books. In each of the last four years, Congress has passed budget resolutions that effectively pushed out the budget ceilings in the Budget Control Act to 2020 and beyond. Sequestration is still out there but the immediate threat has faded considerably.
But I argue that we still feel its impact today and in many ways we still suffer the consequences.
Industry executives and observers have said the cuts caused delays in spending on IT priorities and particularly when it comes to IT modernization.
And we still are trying to figure that out. The percentage of IT budgets that go just to keep the lights on remains stuck in the 80-percent range.
The gap between what is possible in the commercial world and the public sector market has not closed appreciably. The government lags behind the commercial world in fundamental ways. After all, a significant number of agencies are still trying to move their email to cloud environments.
Granted we are seeing some progress in these areas. Agencies are trying to upgrade their IT systems but the Technology Modernization Fund is just $100 million, an amount that doesn’t really move the needle.
How much farther along would we be if sequestration had never happened?
Another continuing impact from sequestration is the damage it has done to the image of working for the government. I think this includes working for a contractor as well as for an agency itself.
Companies had to furlough employees or cut their pay. Contract awards were delayed or cancelled. There was a lot of instability and uncertainty. The government market was not a fun place to be.
I’ve heard more than one executive talk about the need to promote the government market’s image as a good place to work because of the damage done by sequestration. More than one has said there is a need to make the government "cool."
In a hyper-competitive job market, sequestration has put the public sector at a distinct disadvantage.
Of course it isn’t insurmountable, but it is an obstacle that didn’t have to be there in the first place.
And now as the year ends we are faced with another possible government shutdown, albeit only a partial one. But it is another reminder of the dysfunction at the White House and Congress.
Things could just get worse before they get better. The Trump Administration will face a divided Congress now that the Democrats have the majority in the House.
Anything can happen of course, but the Budget Control Act comes back into play at the end of fiscal year 2019. If there isn’t another budget resolution, the limits in the BCA are back in place. That means automatic cuts.
We could relive the sequestration nightmare all over again. And that won’t be good for contractors or anyone else.
Posted by Nick Wakeman on Dec 19, 2018 at 1:34 PM