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Contractors, customers both hurt by short-term budget extensions

Contractors, customers both hurt by short-term budget extensions

For nearly six months, the federal government has operated under temporary funding measures, leaving many agencies and contractors in limbo, unable to plan or execute new initiatives.

Congress passed the latest in a string of continuing resolutions this week, and President Barack Obama signed it today. The newest temporary funding measure gives lawmakers until April 8 to reach an agreement on 2011 appropriations or again face a government shutdown. But operating on a string of stop-gap measures, with no solid ground for planning or spending authorizations, is untenable, according to many experts.

John Palguta, vice president of policy at the Partnership for Public Service, described funding as a “huge part of the planning process” and said that continuing resolutions make it hard for agencies to gather important data.

“Long-range planning is very difficult under a series of continuing resolutions because there is so much you don’t know,” Palguta said.

 

Media reports have indicated that many in the government feel they have been operating in chaos and confusion. “Officials at various agencies have frozen hiring, canceled projects, delayed contracts, reduced grants and curtailed training, travel and upgrades in information technology,” wrote Robert Pear in the New York Times.

Pear cited examples of disruptions at the Social Security Administration, the Securities and Exchange Commission and the Defense Department. Short-term budget extensions can also interrupt the execution of government contracts.

Elizabeth M. Robinson, the chief financial officer at NASA, said: ‘Most agencies have pushed the renewal of major contracts into the winter and spring. Uncertainty has slowed down our spending. That uncertainty takes a toll,’” Pear wrote.

 

Government IT projects could suffer because of ongoing budget constraints. When the budget cycle starts getting disrupted, it creates a lot of issues with resource allocation, said Gary Labovich, a senior vice president at Booz Allen Hamilton.

Labovich said that assigning staff becomes a challenge for vendors if IT projects are stopped or slowed down. “We have to move key people on to other work,” he said. “We don’t have the luxury of keeping people on the side until the government figures out” its budget.

From the government perspective, budget interruptions can lead to inconsistency in personnel and result in derailed IT projects, Labovich added.

Overall, the effect of the budget dispute on government operations varies by agency.

Palguta said that while some agencies have been asked to take on more responsibilities, they have not received an increase in funding. The six continuing resolutions that have been enacted so far fund agencies at 2010 levels.

Agencies “can’t continue to do the same work or do more work with the same or fewer resources,” Palguta said, adding that, at some point, agencies might have to reduce the types of services they offer.

The strain on agencies has also, unsurprisingly, hindered federal managers and their employees’ abilities to do their jobs, according to sources. This type of environment – with the possibility of a shutdown looming in the background – reduces productivity due to lower employee engagement, Palguta said.

“The continued reliance on temporary funding measures and the creation of a crisis atmosphere with repeated threats of a shutdown is not a responsible or a smart way to govern,” wrote Max Stier, president and CEO of the partnership, in Politico.

Despite signing the latest CR, Obama has signaled that he is unwilling to continue the trend of short-term measures. At a news briefing earlier this month, he said it is “irresponsible” to keep running the government based on two-week extensions.

Now it’s up to Congress to come up with a solution that will ensure the government remains fully functional for the remainder of 2011.

 

John Clancey Don Rhea

 

 

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March 30, 2011 Posted by | engineering services, SDB, SDVOSB, Small Business Administration 8(a), small business contractor | , , , , | Leave a comment

Senate passes $34.5 billion FAA bill

Senate passes $34.5 billion FAA bill

 

The Senate on Monday passed a $34.5 billion measure, by a vote of 93-0, that would upgrade the nation’s aging air traffic control system, limit tarmac delays for passengers and increase taxes on several areas within the airline industry.

The bill, which funds the Federal Aviation Administration through September 2011, calls for the air traffic control system to switch from World War II-era radar technology to a satellite-based system by 2014 at the busiest airports, and nationwide by 2020. The new system known as NextGen would cost the FAA about $22 billion through 2025 while airlines would spend about $20 billion to upgrade their airplanes’ computer systems.

With the numbers of airline passengers growing, the new air traffic system is expected in the long term to increase safety, save airlines money, reduce delays and cut down on pollution because pilots will be able to fly more direct routes.

The bill, which will have to be ironed out in a House-Senate conference, raises an additional $276 million in revenue from the expansion of several taxes.

The measure sets the general aviation jet fuel tax rate at 36 cents a gallon, up from 22 cents. That is expected to raise about $113 million through 2014. Private business jet charters would see taxes increase from 4.4 cents a gallon to 36 cents, and they would pay as an a 14-cent surtax on fuel, which is expected to raise $107 million through 2014.

In addition, planes weighing 6,000 pounds, which were previously exempt from the taxes, would have to pay into the Airport and Airway Trust Fund, raising about $56 million over 10 years. Under the Senate bill only sightseeing planes are exempt.

During Monday’s debate Senate Commerce ranking member Kay Bailey Hutchison (R-Texas) said “we still have a long way to go on this legislation, I hope we can do it.”

 

 

 

February 22, 2011 Posted by | aviation engineering, Department of Defense (DOD), engineering services, Federal Aviation Administration, SDB, Small Business Administration 8(a) | , , , , , | Leave a comment