Contractors Quietly Optimistic Following Sequestration Delay

January 6, 2013

While the two-month delay in planned federal spending cuts that Congress approved last week provides short-term relief for government contractors, many companies said the move does little more than maintain the uncertainty that has plagued them for months.

Still, some are choosing to read the “fiscal cliff” deal, which pushed back the start of about $1 trillion in automatic cuts, as a sign that neither Congress nor the president has any intention of letting sequestration take effect.

“The implication is clear [that] the system will probably compromise on sequestration,” said Loren Thompson , a defense industry consultant. “Defense executives are beginning to suspect sequestration as they had feared it will not unfold and, although there will be some cuts, they’ll be more modest.”

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