Virginia senators fear sequester

Government contractors will bear the brunt of budget cuts fallout, says Sen. Mark Warner.

Sign warning of fiscal cliff

Sequestration could be devastating to Virginia's defense industry, lawmakers warn. (Stock image)

Defense agencies could be prepping for a 25 percent reduction in across-the-board federal IT spending if sequestration takes effect March 1, according to Sen. Mark Warner (D-Va.).

Speaking on Feb. 8 alongside Sen. Tim Kaine (D-Va.) at an event hosted by the Northern Virginia Technology Council in Reston, Warner told a tech-centric audience that some defense projects have already stalled or been preemptively canceled because of sequestration and warned that cuts in IT spending could be "phased in" as the sequester approaches if the automatic cuts in defense spending are not averted.

Sequestration will hurt taxpayers and be "worse than you can imagine," Warner said. He later told reporters that "nobody is going to get a hurt more by these cuts than government contractors."

The pain has begun, according to a new study by Centurion Research, which found that contractors have already taken revenue hits and see fewer new business opportunities. Eighty percent of surveyed contractors expect a "moderate to significant" impact in 2013, and close to 90 percent expect a similar impact on new program starts and award schedules.

In addition, examples of budget-driven cuts in federal IT are already surfacing.

On Feb. 7, for example, defense agencies canceled a request for bids on agile development support and services, and the Defense Information Systems Agency recently canceled procurement for an IT infrastructure library "due to budgetary concerns."

In addition, the Navy has delayed the award of its Next Generation Enterprise Network contract until at least May, though officials said the delay was not related to sequestration specifically.

Warner said Congress and the Obama administration rightfully share "80 or 90 percent" of the blame for bungling budget and spending talks but said the defense industry deserves some criticism, too.

"We have muffed this thing four times," Warner said, "and shame on the defense industry for being absent in the discussion."

"Every time [there are] efforts to build a broader coalition to say, 'Let's go ahead, let's take this on, get out of your political foxholes and industry foxholes,' most of you have said, 'Well, I don't want to piss off this guy or that guy or this chairman or that chairman,'" Warner said. "You ought to take some blame, too."

Both Kaine and Warner spoke about potential sequestration solutions -- for instance, replacing this year's $46 billion in defense cuts with additional cuts and revenue -- but both admitted that sequestration is a distinct possibility, even if it is bad policy.

"We should have a national security policy that drives a budget, not a budget that drives a national security policy," Kaine said.

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