Monday, September 10, 2012


According to the Congressional Research Service (CRS), in 2013, whether by sequestration or other budget cutting methods, these changes will take place: solicitations will be canceled; options will not be exercised; limitation of funds clauses clauses will be used by agencies; only minimum orders will be placed under Indefinite Delivery/Indefinite Quantity (IDIQ) contracts; the changes clause will be used with greater frequency; the level of work will be reduced; the period of performance will be revised; the stop work order clause will be used; acceleration of performance will be ordered; contracts will be termination for default or convenience; and multi-year contracts will be canceled.

This is quite a list and most commentators believe government agencies will use any or all of these methods to save money.  So what should contractors do?  The preparations guide is simple but difficult.  Here are our tips.

  1. Investigation and communication.  Contractors must redouble their efforts to ferret out what the government plans for their programs and contracts.  This requires full time attention by senior executives playing detective and investigative reporter.
  2. Get actively involved in industry associations.  We are constantly amazed by the level of activity and information gathering and reporting accomplished by Stan Soloway, Alan Chvotkin and all the folks at the Professional Services Council (PSC).  There are many other industry associations but PSC stands out in service to its members.  Join now whether you are in services, supplies or construction.  Participate in the Government Affairs Committee.
  3. Line up your claims experts.  You may not like claims, but you are now being forced into careful consideration of whether and how to submit them.  Line up the benefit of the experienced hands who have spent their careers in the claim trenches.
  4. Document, document, document.  Each piece of information must be collected and filed.  No more go home at night and relax.  The night is now time to prepare your memo to file about everything you learned during the day, about every bit of information you picked up along the way.
  5. Know your rights (and responsibilities).  Now would be a good time to refresh yourself on the rules.  Government contracting is all about the rules and regulations.
Changes in the way the government does business will occur in 2013, one way or another.  Those changes will most assuredly involve some or all of the actions listed by the CRS.  We probably should add breaches of the contract of every imaginable type.  And, we can expect the government to try to hide behind the sovereign act defense (see our discussions elsewhere in this blog).  Those who are vigilant will survive.  Those who hesitate will be left behind.  

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