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Summer Journal

Volume 31, Issue 2

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If you’re a government contractor, the time to prepare for the across-the-board budget cuts contained in the Budget Control Act of 2011 (the “Act”), also known as the “sequestration,” is — well — yesterday.  The Act requires the federal government to cut $1.2 trillion from the budget beginning in FY 2013 through FY 2021.  Discussions of sequestration have begun to take a “boy who cried wolf” quality, leading some contractors to assume that at the last minute, Congress will work things out.  But recent statements by policymakers and media outlets are more insistent than ever that this time, the sequestration will be a “go.”  An article in the National Journal on February 11, 2013 announced that “[s]equestration is now the most likely scenario. . .”  The Examiner.com predicts:  “Sequestration is going to happen, or something like it.”  This somewhat vague prediction makes an important point that even if Congress and the President were to agree on a sequestration “replacement” bill this fiscal year, the pressure for long-term reductions in discretionary government spending on which government contractors largely depend is unlikely to ease.  Thus, contractors are likely to face a smaller pool of available funds one way or another.