Congress did not reach an acceptable budgetary compromise with the President. $85 Billion in federal cuts will continue until a compromise is reached or until the end of the fiscal year on September 30th. $42 Billion of the entire total will come from reductions in the Department of Defense (DOD). This targeted amount is to be taken by all programs, all military agencies, all civilian employees and all contractors. In the Washington, DC area contractors make up a large portion of the DOD workforce.
Currently, the DOD is not accepting new contracts and is anticipating the renegotiation of existing contracts based on sequestration impacts. This means that there will be less parts and people available for the contracts to be executed at their full performance schedule.
Some contracts will not be affected as their requirement for this fiscal year’s funds have already been obligated during the beginning of the fiscal year in October. Other contracts that are functioning on a monthly basis or are up for renewal between March 1st and September 30th may be eliminated or not renewed.
One major concern for the DOD while slowing down or stopping contracted work is the increased costs to restart the work when the sequestration has ended. Contracts are made based on the best skills for the most economical costs.
Some projects that were already started before the onset of sequestration may need to totally begin again because of contamination or erosion of materials during the down time. This will require additional new funding to complete the work.
Some contracts may actually need to be increased for personnel support when the civilian employees are furloughed. This need would be in critical mission areas such as electronics. Work that has begun on new equipment or repairs to aircraft, naval vessels and ground transportation vehicles may be put on hold until the necessary parts can be purchased.
The DOD also contracts training instructors for both military and civilian classes. Under sequestration only critical training will continue. Job enhancing classes will be cancelled. Where available, courses may be taught via teleconferencing. A contractor led course that was to bring students to the Professional Education Center at Camp Robinson in Arkansas may be conducted by the contractors using teleconferencing from an Arkansas classroom to students located throughout DOD.
The sequestration is currently scheduled to continue until the end of the fiscal year on September 30th. If Congress does reach a compromise and the President does signs it, sequestration will cease at that point and the DOD can again concentrate on mission readiness.