Deficit Reduction | The Contracting Education Academy

January 10, 2013 By AMK

White House talks of ‘eliminating’ sequester, but vague on timing

White House Press Secretary Jay Carney was vague Jan. 8 about just when President Barack Obama will launch talks with lawmakers about avoiding deep cuts to planned Pentagon spending.

Carney, during his daily press briefing, did indicate the White House wants to avoid the full $500 billion in cuts to projected defense and domestic spending over the next decade.

“The fact is we have two months because of the fiscal cliff agreement, and that is not a great deal of time,” Carney said. “The president will, and the White House will, engage with Congress on those matters in, I think, the relatively near term.”

Keep reading this article at: http://www.defensenews.com/article/20130108/DEFREG02/301080008/White-House-Talks-8216-Eliminating-8217-Sequester-Vague-Timing-Talks?odyssey=nav%7Chead.

January 4, 2013 By AMK

Agencies, contractors chafe at cliff deal’s uncertainty on sequestration

The freshly passed legislation designed to avoid the fiscal cliff kicked the proverbial can of sequestration down the road by two months, worsening already existing uncertainty about agency spending levels, according to contractors and budget analysts.

By postponing but not replacing the across-the-board automatic cuts that the 2011 Budget Control Act slated to go into effect on Wednesday, lawmakers who crafted the primarily tax-oriented bill that cleared the House late Tuesday night ratcheted up the pressure on agency managers and private providers of services to government.

“What the press tended not to explain is that the size of the sequestration was reduced by 22 percent or two-ninths,” said Richard Kogan, a senior fellow at the Center for Budget and Policy Priorities. “So instead of squeezing a sequestration of size X into nine months, you would be squeezing a sequestration that is two-ninths smaller into seven months.”

Keep reading this article at: http://www.govexec.com/management/2013/01/agencies-contractors-chafe-cliff-deals-uncertainty-sequestration/60434/?oref=govexec_today_nl

September 11, 2012 By AMK

Contract law gives U.S. government options for automatic cuts

A little-known aspect of U.S. contract law may provide a road map for how the Obama administration can implement billions of dollars of automatic budget cuts due to take effect in January without having to pay massive change fees to its contractors.

U.S. courts have found that the government has certain contractual rights because of its sovereign standing, including the right to unilaterally change the terms of its contracts, delay or stop work on contracts or terminate them outright, a congressional report found.

Keep reading this article at: http://www.reuters.com/article/2012/08/29/us-pentagon-budget-cuts-idUSBRE87S1DX20120829.

October 11, 2011 By AMK

Making smart cuts

As the government looks to operate more efficiently with fewer resources during the current budget crisis, it is crucial that the president and congress communicate a clear vision for what the federal government should deliver and allow agencies some flexibility on how to best achieve cost-reduction targets, according to a new report.

The report, released Tuesday by the Partnership for Public Service and Booz Allen Hamilton, recommends that the president and Congress communicate a clear vision for deficit reduction, in part by designating a high-level official to lead the cost-savings effort and establish measurable goals that include mechanisms for accountability and transparency. The report examines some of the lessons learned from the Clinton-era government downsizing initiative during the 1990s.

“Congress should also use its oversight role to make sure agencies consider mission, employees and customer impact when making cuts,” the report states.

The report also recommends that agencies play a role in considering alternative ways of delivering services and performing functions, including embracing information technology. Clinton’s reinventing government initiative, for example, was instrumental in changing regulations that made it hard to justify and buy technology because it was considered an office expense. “The regulatory change helped to foster agencies’ adoption of new technologies,” the report states.

At the same time, however, budget cuts in the 1990s also prevented some agencies from taking advantage of emerging technologies, forcing them to put off IT investments that resulted in outdated systems and unsupported software, the report noted. In addition, agencies that were able to make up-front investments in IT during that time tended to customize off-the-shelf software, which often was costly to maintain and upgrade, the Partnership and Booz Allen found.

But now, agencies can find significant technology savings in ways that were available in the 1990s, in part through buying new systems with lower maintenance costs, employing cloud computing and consolidating data centers, the report states.

“However, no investment in IT will be successful unless agencies take people and process into account,” the report states.

In addition to IT investment, the report also calls on government to look at the costs and benefits of other strategies, including across-the-board cuts, programmatic cuts, decreasing administrative costs, personnel reductions, consolidating or centralizing functions, reengineering and outsourcing.

— by Brittany Ballenstedt – Government Executive – October 3, 2011 – http://www.govexec.com/dailyfed/1011/100311ww.htm

August 22, 2011 By AMK

OMB directs agencies to cut 2013 budgets

The Obama administration is directing federal agencies to submit fiscal 2013 budget requests that are at least 10 percent below their current appropriation level.

Citing fiscal pressures and the recently enacted deficit reduction package that raised the debt limit, Office of Management and Budget Director Jacob Lew sent a memo Aug. 17 to agencies instructing them to plan a 2013 budget that is at least 5 percent below their 2011 spending levels. Agencies also should identify additional savings that would bring their 2013 budget requests to at least 10 percent below their current enacted appropriations.

“By providing budgets pegged to these two scenarios, you will provide the president with the information to make the tough choices necessary to meet the hard spending targets in place and the needs of the nation,” Lew said in the memo.

To identify savings, agencies cannot propose across-the-board reductions or reductions to mandatory spending in appropriations bills, reclassifications of existing discretionary spending to mandatory, or any new user fees to offset existing spending. Agencies can include funding reduction proposals that fall into those categories as separate items on their own merits, or for consideration as alternatives to the main cuts outlined in the budget request, Lew said.

He also directed agencies to identify programs that are cost-effective and “provide the best opportunity for economic growth,” by eliminating duplicate or inefficient programs. Agencies should consider program integration, reorganization and realignment of resources.

“I know this will be a difficult year, but it will also offer an opportunity to make the hard decisions to invest where we can get the most done and pare back in other areas,” Lew wrote in the memo.

Carol Bonosaro, president of the Senior Executives Association, hopes agencies target wasteful or redundant programs for cuts rather than slash funds for things like employee training.

“While agencies cannot propose across-the-board reductions, that is exactly what OMB has ordered — an across-the-board reduction, albeit while telling agencies to identify programs that are cost effective,” she said.

The largest federal employee union criticized the administration’s directive to cut spending at a time of high unemployment.

“With 14 million Americans officially unemployed, and another 10 million who have either given up looking or are stuck with part-time work when they want and need full-time work, why on earth would the administration be trying to dig an even deeper hole?” asked John Gage, president of the American Federation of Government Employees. “Spending either 5 percent or 10 percent less in 2013 than we spent in 2011 on public safety, veterans’ services, law enforcement, anti-terrorism activity and education support will not solve our problems — it will only make them worse.”

Colleen Kelley, president of the National Treasury Employees Union, called the approach “unwise and counterproductive” when it comes to ensuring agencies meet their missions.

“Budget cuts of as much as 10 percent would seriously impede critical progress at federal agencies,” she said in a statement. Kelley cited examples of programs at agencies such as the Food and Drug Administration and Internal Revenue Service that could suffer as a result of decreased funding, adversely affecting the public.

— by Kellie Lunney – Government Executive – August 18, 2011 – http://www.govexec.com/story_page_pf.cfm?articleid=48572&printerfriendlyvers=1

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