Implementation Of Sequestration On Government Contracts

Today, the President issued a Sequestration Order that requires federal agencies to make uniform percentage reductions in each separate item in their budgets.  Under that Order, the agencies will be obliged to apply a mandatory percentage cut (effective reductions of 13% from national security programs and 9% from civilian programs) to each covered line item in their budgets, resulting by September 30 in equal reductions of roughly $42.7 billion each from Defense and civilian programs.

After the drama of the announcement, the first days of implementation of the sequester will be an anti-climax.  The sequestration statute does not require the agencies to take any action on March 2, March 3, or March 4, etc..  Their only legal duty is that by September 30, they must have reduced the amount of FY 2013 budget authority they obligate by the required percentage amount.  The agencies can delay as long as they want in making the cuts.  But the longer they wait and the more