sequestration | The Contracting Education Academy

September 6, 2019 By cs

Budgets require industry-government cooperation

We should all celebrate the recent passage and signing of the 2019 Bipartisan Budget Act that ended the federal budget impasse and did away with the destructive spending caps imposed by the 2011 Budget Control Act.

Thankfully, the way legislators wrote the budget deal and its two-year coverage means the threat of sequestration has finally passed.

Observers will note, however, the budget deal hints at the feared decline of defense resourcing going forward. While the defense topline grows by 2.64 percent in 2020, that growth slides to 0.33 percent in 2021; and these percentages do not consider inflation. That is well below the 3-5 percent real growth after inflation called for by former Secretary of Defense Jim Mattis. He saw that growth level as a requirement to regain readiness and make the necessary investments in modernization and recapitalization to ensure the U.S. military can carry out the National Defense Strategy.

While defense experts, think tanks and the Defense Department all call for fully resourcing the strategy, harbingers of flatter defense budgets yet again call for the hard thinking required to get the absolute most out of every defense dollar spent. One critical avenue of that approach is better government-industry collaboration. The more government can work with industry to identify key technology and workforce investments, telegraph future requirements, and develop innovative contracting vehicles, among other things, the more efficiently and cost-effectively industry can provide the best services and products to our warfighters over time.

Keep reading this article at: https://www.nationaldefensemagazine.org/articles/2019/8/29/ndia-perspective-budgets-require-industry-government-cooperation

August 7, 2017 By AMK

Contract protests up, contract awards down — what to do?

Recent data indicates that protests have increased overall by approximately 17 percent since 2012, exceeded only by the decrease in government contract spending over that same time.

The resulting increase in pre-award costs derived from protests for all parties concerned requires a step back to analyze what is driving this not-so-encouraging trend, and what, if anything, should be done about it.

Most involved in government contracting today understand the recent trends of a declining overall market. Topping out at almost $600 billion a few years ago, the current federal budget has been squeezed by such things as the Budget Control Act of 2011, automatic budget sequestration, mandatory cuts, spending caps, and overall drawdown of U.S. military operations worldwide. Contractors are now competing for ever fewer dollars, as the government’s “mandatory” spending — in areas such as healthcare and retirement — continues to shrink the “discretionary” dollars available for everything else. This has resulted in many contractors leaving the federal market, either through mergers or simply going out of business, or diversifying into other business lines.

Keep reading this commentary at: http://www.federaltimes.com/opinions/2017/07/25/contract-protests-up-contract-awards-down-what-to-do-commentary/

May 26, 2017 By AMK

Tight budgets bring a silver lining

For years, the question of when the government might return to “regular order” – that is, a “normal” process in which appropriations are essentially completed by the end of September — has been a prominent one.

Agency leaders, industry, and others, have continually and appropriately harped on the deleterious impacts of the funding yo-yo that has dominated the scene for far too long.

And if there was one thing many hoped for as a result of having one party in control of both the White House and Congress, it was a return to regular order.

Well, it’s probably not going to happen. As virtually all recent reports have indicated, the budget debate within the parties, let alone between the parties, remains fierce and the chances of getting a full year fiscal 2018 funding bill by Sept. 30th are slim indeed.

President Trump’s budget blueprint – the “skinny budget” — generated plenty of debate; the release of his full proposed budget will only turn up the heat further. No  budget resolutions have yet been proposed, let alone passed, and no spending instructions given to the appropriations committees.

Keep reading this article at: https://washingtontechnology.com/articles/2017/05/22/insights-soloway-budget-silverlining.aspx

October 5, 2016 By AMK

DoD research spending took brunt of sequestration cuts

Defense Department spending on research and development has suffered historic declines during the budget drawdown that’s been in progress since 2009, falling much more sharply than the rest of DoD contracts, and reversing the usual pattern in which the military has tended to guard its R&D funding so it has systems ready-to-procure the next time it goes to war.

The insights came via one of the deep dives the Center for Strategic and International Studies regularly conducts into federal procurement data. The center found dollars spent on R&D contracts fell by 53 percent between 2009 and 2015 even while overall contract spending declined by only 35 percent.

Put in terms of its share of a shrinking pie, R&D makes up just 8 percent of Defense contracts now, compared to 11 percent five years ago.

Researchers said the spending cuts had created a significant “trough” in funding for future weapons systems, something top Pentagon officials had warned about in 2013, when the sharpest R&D declines started to take place because of the Budget Control Act.

Keep reading this article at: http://federalnewsradio.com/dod-reporters-notebook-jared-serbu/2016/09/dod-research-spending-took-brunt-sequestration-cuts/

August 28, 2015 By AMK

Cloud of sequestration looms over DC region

Five weeks before another round of deep Defense Department cuts is set to go into effect absent action from Congress, budget analysts and elected leaders throughout the region are renewing concerns about the Washington area’s reliance on Pentagon spending and the need to advance private sector growth in its place.

No state is more reliant on defense spending than Virginia, where it affects nearly 13 percent of the commonwealth’s economic output, tops nationwide, and provides the basis for 11 percent of jobs, third in the nation.

D.C. and Maryland also rank in the top 10 in Defense Department spending among states, with 6.9 percent and 5.8 percent of their output relying on defense respectively, according to a department report released last year.

In some ways Virginia is still reeling from automatic spending cuts known as sequestration that took place in 2013. The state’s gross domestic product had zero growth in 2014, according to a recent Department of Commerce report, third worst among states.

Keep reading this article at: http://www.washingtonpost.com/news/digger/wp/2015/08/23/cloud-of-sequestration-looms-over-d-c-region/

We should all celebrate the recent passage and signing of the 2019 Bipartisan Budget Act that ended the federal budget impasse and did away with the destructive spending caps imposed by the 2011 Budget Control Act.

Recent data indicates that protests have increased overall by approximately 17 percent since 2012, exceeded only by the decrease in government contract spending over that same time.

For years, the question of when the government might return to “regular order” – that is, a “normal” process in which appropriations are essentially completed by the end of September — has been a prominent one.

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