President Obama signed a spending bill marking the first time an appropriations bill has been approved since… are you ready… 2009. Yeah, that’s right, the government has been running on borrowed time since then. They have been issuing continuing resolutions leaving the questions open for debate:
Will the government default? Will the government be “open” tomorrow? What about that contract funding? Am I going to get that option year? They go on and on…
The silver lining on this is that there was some actual movement and some actual appropriation. That is, of course for NASA, Agriculture, Commerce, Justice, Transportation and Housing and Urban Development departments – those covered by the signing on Friday. In the debate preceding Thursday’s House vote, lawmakers voiced hope that Congress could approve all remaining 2012 spending legislation by next month… and of course, you already knew this, but the 2012 fiscal year began in October.
The second part of this is a little darker. The “Sword of Damocles” takes the form of automatic, across-the-board spending cuts if Congress can’t agree to at least $1.2 trillion in deficit reduction. And as the first key deadline to avoid those cuts looms just days away, the 12-member deficit reduction supercommittee is playing tug-of-war with the horse’s hair.
So, what does that mean for government contractors? Potentially a lot, but most likely very little. There have been many close calls in the past and although most contracts have a clause that basically states: “as long as funds are available,” there will most likely be a solution. Now, I am an optimist at heart, but business as usual should be continued until the government gives you a stop-work order. In the meantime, prepare for the cuts by gaining efficiencies and effectiveness in your processes. There are many tools (some featured around this blogsite) and many process improvements out there. To be continually effective in a shrinking government contracting pool, it will take some cuts, but not necessarily in headcount, just in wasted time.
What are YOU doing to prepare as a contingency plan for an actual significant shutdown? What are you doing to prepare for the future cuts?