Sequestration | The Contracting Education Academy

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/

February 2, 2015 By AMK

DoD’s FY16 budget could lead to increased contracting activity

The Department of Defense (DoD) will be asking for a budget of $585 billion for fiscal year 2016, according to a draft Pentagon comptroller document obtained by Politico. This amount represents $38 billion more than the budget which DoD has been operating under as a result of sequestration.

In order for DoD’s budget amount to be approved, Congress will need to agree to suspend or discontinue sequestration. DoD’s five-year budget plans call for ramping up base defense spending to $570 billion in 2020.

According to the draft budget documents, DoD will request $209.8 billion in funding for operations and maintenance, an increase of $14.5 billion from this fiscal year. The proposal would also increase procurement spending by $14.1 billion to $107.7 billion, and research and development funding by $6.3 billion to $69.8 billion.

Among the projects included in the Pentagon’s draft FY16 budget are:

Three new Littoral Combat Ships (LCS),
LCS capabilities improvements,
Two Virginia-class attack submarines,
Refueling of the USS George Washington aircraft carrier,
The Ohio-class replacement nuclear submarine program,
The KC-46A tanker program,
A new long-range bomber,
The MQ-9 Reaper procurement, and
57 F-35 fighter jets.

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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