January 20, 2012

John Cooney quoted in Washington Technology on potential sequestration impact on contractors

2 min

Venable partner John Cooney was quoted in a January 19, 2012 article in Washington Technology on the potential impact of sequestration on federal contractors. Sequestration is an indiscriminate and across the board cutting of the federal budget as a result of last year’s failure by the Congressional supercommittee to agree on $1.2 trillion in savings.

Speaking at a January 17 panel hosted by the Professional Services Council, Cooney said federal contractors “are hostages in a showdown between the president and Congress over fundamental decisions on taxing and spending.” Breaking down potential routes federal agencies may take to deal with the cuts, Cooney said he expects agencies to, “Try to avoid terminating contracts (instead, officials will reduce the amount of money obligated under their contracts); become less willing to extend contracts into their option years; obligate money for one fiscal year at a time on task order and services contracts; and possibly use the prospect of the sequester's cuts to renegotiate contracts.”

Adding that agencies likely will not award new contracts, Cooney said, “This will be a common agency practice in year one of a sequester. Procurements that can be put off will be put off.” Cooney also offered suggestions to companies seeking federal contracts saying, “Advocate for the importance of a program and stay in close contact with a contracting officer. Realize though that the officer may not know the fate of a program until very late in the process.”