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Weathering the Storm: How Contractors Can Prepare for Upcoming Budget Cuts

Topic: Risk Management
Original Air Date: Thursday, May 26, 2011
Program Code: 170031
CPEs: 1.50

The current budget and funding crisis has created serious implications for companies performing contracts for the United States. Our federal government has performed under stop gap appropriations resolutions for over half of the fiscal year, at flat spending levels that are insufficient to fully execute many on-going contracts. Moreover, the proposed budget reflects significant cuts in funding available for procurements. As a result, the Government will be forced to take steps to reduce its procurement spending by changing or restructuring contracts. Contractors can expect contract terminations, de-scoping of quantities, and capabilities, contract stretch outs, breaks in production, and efforts by the Government to restructure contracts to make them more affordable. Accordingly, it is imperative to understand the implications of these issues, including the Government's right to take unilateral action, and to properly plan for them.

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Elizabeth Ferrell, Partner, McKenna Long & Alridge, LLP

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