Preparing for Sequestration – Driven Contract Terminations and Restructures

Guest Author: Elizabeth A. Ferrell, McKenna Long & Aldridge. Originally posted at http://www.mckennalong.com/publications-advisories-3160.html   With the looming threat of sequestration, there is significant uncertainty regarding the budgetary resources that will be available for the reminder of the fiscal year. Unless Congress acts to prevent sequestration, beginning March 1, 2013, approximately $85 billion in budgetary resources across the Federal Government will be cancelled. On January 10, DoD issued initial planning guidance on sequestration. See “The Department of Defense Issues Initial Planning Guidance on Sequestration”. This week, on January 14, 2013, OMB issued a Memorandum for the Heads of Executive Departments and Agencies providing guidance on planning for the impact of a sequestration order. While the OMB guidance is fairly limited, OMB has tasked agencies with indentifying means to reduce … Continue reading

Healthcare – A Look Ahead at 2013

Rod Benson prepared this blog.  He serves as Counsel for the Washington, D.C. law firm Buchanan Ingersoll & Rooney.  Rod previously served as the Director of Acquisition and Grants for the Centers for Medicare and Medicaid Services.   As companies consider business opportunities with the Federal Government, they are increasingly pursuing healthcare-related contracts.  Budgets throughout the Federal Government are tightening.  The threat of sequestration may result in significant budget cuts for the Department of Defense (DOD).  However, budgets for agencies like the Centers for Medicare and Medicaid Services (CMS) continue to grow based upon expanded responsibilities.  As a result, in the past few years, many traditionally DOD contractors have ventured into healthcare. The coming year should offer increased contracting opportunities in healthcare.  Most significantly, the … Continue reading

Afterthoughts: Contract Implications of Sequestration

Following each Nash & Schooner Hot Topics Webinar event, we interview Professor Ralph Nash to get his thoughts on the topic following the panel discussion.  On October 25th, Professors Ralph Nash and Steven Schooner discussed the contract implications of potential sequestration.   Do you think sequestration will happen? I don’t think anybody knows whether it will happen or, if does happen, how long it will last.  My belief is whether it happens or not there are going to be significant cuts in procurement spending.  So people ought to be planning for sequestration without regard to whether it does or does not occur.   If you were a contractor looking at your company’s portfolio of government contracts, would there be particular contracts that you would be … Continue reading

To WARN or not to WARN

Guest Author: Sajeev Malaveetil, Berkeley Research Group, writes:  The 1988 Worker Adjustment and Retraining Notification (WARN) Act requires employers with at least 100 employees to provide written notice to “affected employees” at least 60 days before ordering a plant closing or mass layoff.[1] Pursuant to the act, failure to provide such notice can result in liabilities equal to back pay and benefits for the period of the violation, up to 60 days.[2] As the threat of a January 2, 2013, sequestration inches closer, the government contracting community is preparing for the possibility of contract terminations and deductive changes. A handful of contractors have already provided WARN Act notices to their employees. The larger contracting community has wondered whether notices under the WARN Act are required … Continue reading

If Budget Sequestration Trims Your Contract: What Contractors Need to Know About Partial Terminations and Deductive Changes

Guest Authors: Neil H. O’Donnell and Dennis J. Callahan, Rogers Jospeh O’Donnell, PC, writes: By definition, budget sequestration is a ham-handed approach to cutting federal spending.  Even if sequestration is somehow averted, however, there can be little doubt that FY 2013 will see a particularly severe round of belt tightening in federal contracting.  In addition to delaying procurements and forgoing the exercise of contract options, federal agencies likely will become more aggressive in pruning the amount of goods and services called for under existing contracts.  How such deletions of work are characterized often falls into a large grey area, and, indeed, the BCAs and courts have not even settled upon a firm standard for distinguishing between partial terminations and deductive changes. The different recovery rules governing … Continue reading

Sequestration: Preparing for the Inevitable

Guest Author: Elizabeth A. Ferrell, McKenna Long & Aldridge. Originally posted at http://www.governmentcontractsadvisor.com/2012/09/27/sequestration-preparing-for-the-inevitable/ Last August, Congress passed the Budget Control Act of 2011.  This law authorized raising the debt ceiling, established caps on discretionary spending, and put a process in place to reduce the federal deficit by sequestering funds through automatic spending cuts beginning January 2, 2013, unless Congress passes a bill which the president signs to avert such a result.  Senior Executive Branch officials, members of Congress and industry leaders all predict catastrophe if sequestration is implemented.  If sequestration occurs, both the defense and non-defense portions of the federal budget would be subject to annual reductions of about $54.7 billion for FY2013. Many expected that OMB’s report to Congress pursuant to the Sequestration Transparency Act … Continue reading