How to lessen sequestration's impact

Making strategic cuts could provide a softer landing from the fiscal cliff, but government's old habits suggest it will be difficult to accomplish.

strategy word cloud

Have federal officials learned the lessons of the 1990s, when they slashed the workforce with little regard for strategy?

Experts say the answer is destined to emerge soon as agencies deal with budget cuts and officials must decide how to trim their spending. Arbitrary cuts to the workforce can harm the government and its ability to work efficiently and smartly.

“I think the issue is how you do the cuts,” said Stan Soloway, president and CEO of the Professional Services Council (PSC). “We know the cuts are coming. The question is will they be made strategically or not.”

Officials at the Defense Department in particular should find strategic ways to balance their reliance on military personnel, civilian employees and contractors, Soloway said. To do that, they must decide which areas they see growing in importance in the coming years and which are likely to decrease in prominence. Obama administration officials and many experts continue to say the acquisition workforce is a key element to smoother government operations and cost savings. At the same time, acquisition has become more complex, particularly in the IT field.

In a survey released Dec. 17, 85 percent of more than 40 senior federal acquisition officials said IT procurement skills are extremely important. However, one-third of the respondents also said the workforce lacks the necessary skills. All the while, IT purchasing has become prominent in government operations. “IT is driving everything we do today,” one participant said. “This is a huge factor as to why we are in the IT business. The answer is that you see IT in everything.”

Officials across government, however, have said the shortage of properly trained procurement employees is among their top concerns. Maintaining the right-sized workforce that has the ability to handle big jobs continues to prove difficult. Agencies need both numbers and skills.

But strategic cuts are not the norm in government, Soloway said. Officials often use a more egalitarian method and make equal cuts across the board.

In the 1990s, Congress reduced the size of government significantly, particularly at DOD. Legislators took away roughly a third of the department’s infrastructure. To meet those reductions, all categories of the workforce took the same hit.

Deep cuts are coming again. In the Senate’s fiscal 2013 National Defense Authorization Act, senators want defense officials to begin creating an “efficiencies plans” for its civilian workforce and for service contractors, which involve cuts. The plans would have to equal the amount of savings DOD expects to get from reductions in its military personnel. The point is to yield savings from fiscal 2012 to fiscal 2017.

Phil Kangas, a director in Grant Thornton’s global public sector, said officials are in limbo about the fiscal cliff and the details of how to plan for reductions and have not invested the time to think

strategically about cuts. When the time comes, they will have to work fast, which means cuts are more likely to be made across the board.

“I believe this will be a scramble for them,” he said.

PSC urged the House Armed Services Committee to oppose the arbitrary cuts to DOD’s workforce in the Senate-passed bill.

“Congress should be reinforcing DOD’s ability to make strategic decisions about its workforce needs and how best to balance its reliance on military personnel, DOD civilians and contractors,” Soloway wrote in a Dec. 14 letter to the committee’s leaders. “Such flexibility is necessary as the mission needs of the department change.”

A conference committee of House members and senators is ironing out the differences in the two chambers’ versions of the bill.

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