DOD civilians, not contractors, can expect sequestration’s first punch

Many defense contractors, both large and small, have been worrying about sequestration and bracing for impact – but it’s the Defense Department workforce that will feel the effects first, according to a new analysis.

Because most contract activities for fiscal 2013 are already funded, the 10.3 percent that sequestration would shave from the DOD budget won't affect them. But with the Pentagon leadership looking at defense cuts of more than $56 billion in fiscal 2013, as many as 108,000 civilian workers could lose their jobs.

The findings are part of a report from the Center for Strategic and Budgetary Assessments released Aug. 24. According to the report, defense contractors could go years without facing sequestration’s impact.

“The delayed effect between budget authority and outlays means that defense contractors would not feel the full effect of sequestration immediately. Sequestration would, however, force layoffs of DOD civilian employees soon after it takes effect,” CSBA’s Todd Harrison wrote in the report. Harrison also noted that base closures, military personnel accounts and overseas contingency operations funds, which pay for the war in Afghanistan, are all exempt from sequestration.

“It will be three or four years before defense companies feel the full impact of sequestration,” Harrison wrote.

The timing of sequestration – a quarter of the way into the fiscal year – means that 25 percent of the fiscal 2013 budget will already have been spent. According to the analysis, that means that to cut funding by 10.3 percent for the year, DOD reduce the workforce by nearly 14 percent.

DOD reported that it plans to employ 791,000 full-time equivalent civilians. This means that as many as 108,000 DOD civilians could lose their jobs in the weeks immediately after sequestration goes into effect,” Harrison wrote. “And the longer DOD waits to reduce its civilian workforce once sequestration goes into effect, the deeper it will have to cut civilians for the remainder of the fiscal year.”

About the Author

Amber Corrin is a former staff writer for FCW and Defense Systems.

Reader comments

Fri, Mar 22, 2013 Ft Knox KY

Debts would be fixed if everyone was taxed for it; Think about it, Congress isn't effected and the President is having a merry ole' time golfing for a million or so. Everyone that voted for him to stay should get taxed, regardless of DOD issues. Keep downsizing the federal Employees\Civilians and Government. Yep that's real smart. I bet you that if Congress wasn't getting paid right now, they would have already fixed the problem, not add to it. Congress does 4 yrs and gets paid for the rest of their lives (most) and a soldier does 20 yrs to keep us fre and gets half that. Boy, aren't we smart.

Tue, Feb 26, 2013 Jay

You know how it is... "First they came for the DoD Civilians, and I didn't speak out because I wasn't a DoD Civilian..."

Wed, Jan 2, 2013

Gs or private sector this will increase the unemployment numbers 108k people is a lot of people to be out of a job

Tue, Dec 18, 2012 EFP

I know this is an old story but you cannot retire from the military and then civil service and collect two pensions. I had to look for civil service after 20 years active because NO ONE IN THE PRIVATE SECTOR IS HIRING!!! They could care less about veterans especially retiree's. They want someone who is young and they can pay peanuts and push around.

Wed, Dec 12, 2012 Casey

@Lucy "and no I was not a veteran either so I had to work my way into the Goverment." -Are you saying that veteran's didn't work their way into the same civil service job? They were just handed it? Nevermind the 20 years experience they have serving the country...

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