Game over: Government contractors sweat looming cuts
"We can't grow our way out of this," Erskine Bowles
When people like me call for significantly smaller government, we are not asking for less government performance. In fact, we want higher performance from a less labor-intensive approach. We want efficiency from state of the art automation.
When we see what happened at Arlington National Cemetery for instance, the military supervised and government bureaucrat run operation can’t bury the fallen and keep the records straight. It is a manual operation. Fixing it appears to be another bureaucratic bungle. There are too many hand wavers and not enough doers with a command of automation technology.
This is the same military that manages logistics for warfighters and we know factually, that is screwed up too. The culture of big government and throwing body count at problems (including Afghanistan) makes no intelligent sense.
Smaller government means laying off hundreds of thousands of government contractors. This is a bad thing because these people will hit the unemployment lines. It is a good thing because it will reduce the debt and deficit. More unemployed will drive down the cost of labor and make it more globally competitive. When America begins to understand that the place has gotten too damned expensive and that wages and prices must be corrected, we will be on the path to recovery.
Obama and company wanted to prolong the agony, to get through the next election cycle. He can’t stop the correction. He can accelerate reducing the size of government. He can divert as much capital for use by the private sector as possible because that is what will produce meaningful employment.
So, it is a good thing that government contractors are sweating it.
“WT Business Beat
By Nick Wakeman
'Fiscal cancer' threatens government market
It is hard to imagine a gloomier outlook for our country than the one presented by the co-chairmen of President Barack Obama’s debt and deficit commission.
They described the situation to the nation’s governors as a “fiscal cancer” that has the potential to destroy the country from within unless tough action is taken.
The government is only taking in enough revenue to cover Medicaid, Medicare and Social Security.
“The rest of the federal government, including fighting two wars, homeland security, education, art, culture, you name it, veterans -- the whole rest of the discretionary budget is being financed by China and other countries,” the Washington Post quoted former Republican Sen. Alan Simpson as saying.
“We can’t grow our way out of this,” Erskine Bowles told the National Governor’s Association. Bowles, a former White House chief of staff under President Clinton, and Simpson are co-chairman of the commission.
The commission will make its recommendations to Congress by the end of the year, after the November elections.
Tax increases are unlikely, so the main weapon will be spending cuts, which will mean canceled or severely curtailed programs.
Here are several ways – in no particular order -- that this might affect contractors:
Slower procurements. Agencies will increase their review of new contracts and task orders before their award. Dedicating funds also will be more difficult.
Increased oversight. It might be hard to believe this can get more intense, but it will. Be ready to defend your contracts.
More canceled programs. More oversight will uncover more poor performers, and these will be the easy contracts to cut.
Less insourcing. Agencies will quickly learn that insourcing will not decrease their costs.
More fixed-price contracts. What the government needs is a more predictable cost structure, and fixed-priced contracting is a good tool for knowing what you are going to spend.
Tougher competition. There will be fewer dollars to chase, particularly for new projects, so the battle for those dollars will be intense.”