Sequestration Impacts on Federal Project Management

I’ve been researching how the US Federal budget sequester continues to impact Federal programs and
projects (1). In interviews with Federal contractors I’ve heard repeatedly how sequester-driven budget
reductions continue a trend to forcing quality levels and rates downward. These impacts are in addition to
outright cancellations and delays in Federal project work. Especially worrisome for contractors are Government pressures to reduce rates for experienced staff and the resulting impact this has on competitiveness and quality.

The impacts of sequestration are not distributed evenly across Federal programs that depend on contracting
and outsourced project work. Grants programs and other areas where funding or awards are not distributed
evenly throughout the year have suffered from outright cancellations. This shows up, for example,
in programs that are science, health, or R&D oriented, and where there is heavy academic or nonprofit

Larger contractors and well organized programs have already adjusted, some via reduced rates paid for
experience. This has impacted smaller subcontractors not accustomed to priming. What I’m hearing also is
that smaller government programs, programs where project portfolio management is less mature, and
independent Federal agencies are the ones where there might be value to helping the agency adjust project
plans, which is something I’m also researching (2).

Whether consulting and contracting opportunities will be generated in response to this is still an open question.
It’s not unusual for details of how contracts are defined and issued to be secret. I know this based on past
research into the role of making procurement operations more open and collaborative (3). There tends to be
resistance to procurement transparency both from the government and from the large contractors who
know how to “work the system.”

Going forward, it will be interesting to see how Federal procurement responds to the current Administration’s demands that Federally managed databases become “open” by default; I expect that there will be much resistance to this and much exception-granting (4).

(3) “Justifying Collaboration in Complex Programs such as Federal Acquisitions”
(4) “The State of Government Data Transparency, 2013”

Copyright (c) 2013 by Dennis D. McDonald, Ph.D. Dennis is a Washington DC area management consultant specializing in project management, digital strategy, and technology adoption. His web site is located here: Contact Dennis via email at [email protected] or by phone at 703-402-7382.

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