Perfect Storm: Agency-by-Agency Impacts of Sequestration
Current agency-by-agency effects of sequestration are:
Agriculture Department: Agriculture Department will not need to furlough food safety inspectors, due to the continuing resolution signed March 26.
Air Force: The Washington Post reported that employees in combat zones, non-appropriated funds employees, and foreign nationals would be excepted from furloughs. The Post also said that further exceptions would be allowed for “safety of life or property.” An Air Force spokeswoman told Government Executive that all Air Force civilian police, security guards and firefighters would be subject to furlough “except at installations where the manning level is under 25 percent.” Continue reading »
Will Sequestration Affect My VA Schedule Contract?
The Department of Veterans Affairs (VA) reminded readers of a special sequestration exclusion in their March 2013 eNewsletter. A special rule exempts all programs administered by VA (including VA Medical Care) from sequestration (but not federal pay or “federal administrative expenses”). Due to this exemption, VA programs such as the Federal Supply Schedule (FSS) Service will not be impacted by budget cuts. Other government agencies are not so lucky. Unless exempt or subject to special rules, 2013 sequestration reductions are uniform by category for accounts and “programs, projects and activities” within accounts. In 2013, the budget sequester will enact $85.4 billion in cuts with a total of $109 billion in cuts through FY2021.
The VA FSS Program supports the healthcare requirements of the VA and other federal government agencies (OGA) under delegation from GSA. VA explains that the exemption is a direct result of the importance Continue reading »
Grant Thornton’s Survey on the Government Contracting Industry – Were Your Predictions Right?
Results of the widely known and anticipated 18th Annual Grant Thornton Government Contractor Survey were recently released, offering both surprising and presumably expected insights. Julian Rosenberg, government contract advisory leader at Grant Thornton reported some noteworthy takeaways from the survey in the areas of cost accounting, company relationships with the DCAA, revenue, profit, win rates as well as indirect cost rates. Highlights from the survey also supplied interesting information on M&A activity.
Fringe Benefits are Increasing
In a time of fierce competition within the government contracting industry, accounting practices related to indirect costs and direct labor can be critical factors. According to the survey, Continue reading »
Perfect Storm: Lawmakers Tighten Belts Amid Automatic Budget Cuts
WASHINGTON (AP) — Members of Congress are traveling less and worrying more about meeting office salaries. Their aides are contending with long lines to get inside their offices and fewer prospects of a raise. Such are the indignities thrust upon the men and women who brought the country $85 billion in government spending cuts this month.
There probably won’t be much sympathy for a senator or congressman making $174,000 a year who is in no danger of being furloughed or laid off, at least until the next election. Continue reading »
Perfect Storm: Congress Extends CR, Government Shutdown Avoided
Lacking the brinkmanship that citizens have become accustom to, Congress voted to extend the continuing resolution (CR) a full 6 days before the current CR was set to expire. President Obama signed the bill over the weekend. The Government is now funded through September 30, 2013 at the levels mandated by sequestration. Congress did make several minor adjustments to the sequestration mandated cuts. For instance, funding was moved to the Department’s of Agriculture’s food inspection service and DoD’s tuition reimbursement program. Continue reading »
And Then They Were Gone…The Department of Defense Slows Payments to Contractors
In August 2012 Defense Procurement and Acquisition Policy (DPAP) issued Class Deviation 2012-O0014 which implemented accelerated payments to prime contractors, who were in turn, to accelerate payments to their subcontractors. On February 21, 2013, Richard Ginman, Director, DPAP, issued a letter which rescinded Class Deviation 2012-O0014. This is only the beginning of the effects of sequestration.
The payment acceleration policy was implemented to assist with the cash flow of all small-business contractors, whether they are prime contractors or subcontractors to non-small-businesses. While the policy of accelerating payments has been rescinded the DoD will continue with the policy Continue reading »
Perfect Storm: Sequestration Meets Snowmageddon
Sequestration, debt ceilings and continuing resolutions, (and March Blizzards) oh my! Government contractors are starting to feel like Dorothy in the enchanted forest. Hopefully, contractors will find their way home just as Dorothy did. But unlike Dorothy, who relied primarily on serendipity, contractors will need to be prepared.
The unfortunate combination of sequestration, debt ceilings and lapsing continuing resolutions (not to mention a March blizzard!) will challenge government contractors in unprecedented ways. Even without the blizzard, this phenomena has been dubbed The Perfect Storm. Some contractors may be lucky enough to avoid any consequences but the vast majority will not be so fortunate. The key to minimizing the negative effects of the Perfect Storm is to be prepared. Towards that end, Aronson has prepared a Perfect Storm “whitepaper.” The whitepaper describes Continue reading »
We’re Sequestered, the Buck$ Stop Where?
Here are some of the programs that would be pared as part of the sequester, according to a report by the White House Office of Management and Budget and letters from administration officials:
Air Travel: An estimated $619 million would be cut from the operations and facilities and equipment accounts of the Federal Aviation Administration, according to a report by House Appropriations Committee Democrats. This could mean major flight delays and an economic hit on the millions of people who depend on air travel every day.
- $483 million cut from the FAA operations budget, forcing all FAA employees to be furloughed for 11 days. On any given day, that could mean that 10 percent of the FAA’s 40,000 employees could be on furlough, resulting in longer delays, reduced air-traffic control, and losses in tourism. There will also be a hiring freeze. Continue reading »
Fiscal Cliff Legislation Lets D.C. Empowerment Zone Incentives Expire
The “Fiscal Cliff” legislation (H.R. 8: American Taxpayer Relief Act of 2012) enacted by Congress earlier this month did not extend the tax benefits provided pursuant to Internal Revenue Code sections 1400 through 1400C with respect to District of Columbia Enterprise Zones (“DC Zones”). Although the legislation retroactively extended the Federal Empowerment Zone incentives for calendar years 2012 and 2013, the December 31, 2011 expiration date for the designation of certain DC Zones being eligible for empowerment zone designation was left unaddressed by the Fiscal Cliff legislation.
As a result, the following DC Zone incentives will no longer be available for tax years beginning on or after December 31, 2011: Continue reading »
Sequestration: HR Actions to Consider
The Washington, DC market has been particularly focused on the impact of pending sequestration outcomes. In October, I participated on a panel addressing preparations for sequestration and our conversation then included topics like triggers of the WARN Act (Worker Adjustment and Retraining Notification), ensuring you have a budget prepared that takes into account program losses, determining the impact on employee compensation and benefits, and conducting scenario based planning to mitigate your risk.
You may have moved forward with some of these actions and now need to ensure your risk is mitigated to the largest extent possible and that you are focusing on key employee retention and engagement. I strongly encourage all executives to Continue reading »
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- A Marriage of Inconvenience: GSA Schedule Contracts & The Contractor Code of Business Ethics & Conduct Clause
- Emerging Small Businesses: To Grow Your Business, You Must Plan For Growth
- Government Contracting: Look Before You Leap!
- GSA Schedules – Strategies for Success
- New Employee vs. Independent Contractor Considerations
- Pay on Display – Understanding the Executive Compensation and Subcontractor Data Reporting Requirements & Ramifications
- The GSA Schedule: Your Ticket to the Federal Market (May 2010)
- The New FAR Codes of Conduct and Compliance Program Provisions
- The Seven Deadly Sins (of contract compliance)