Defense Department Controller Robert Hale says he does not foresee DoD canceling contracts if sequestration takes effect. Instead, DoD is more likely to deal with budget pressures by declining to pick up contracts’ option periods and simply not awarding new contracts.
“I would like to say, to reassure them, if you’ve got a contract with us, we’re going to pay you,” Hale said. Even under sequestration and with employees taking furloughs, he added, DoD will keep making payments on time.
A contract option period allows agencies to buy additional quantities of supplies or work without further negotiation between the agency and company.
Defense officials are delving into specifics on what the department really needs to buy and what projects to continue.
Keep reading this article at: http://fcw.com/articles/2013/02/21/sequestration-contracts.aspx.
DoD Secretary Panetta’s 2/20/2013 memorandum on furloughs may be seen here: http://www.defense.gov/releases/release.aspx?releaseid=15826.