Contractors already feeling budget pinch

Thursday - 10/27/2011, 10:17am EDT

Elizabeth Ferrell, partner, McKenna Long & Aldridge

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Federal employees are not the only ones in the crosshairs of budget cutters.

Governments contractors are also coping with the Budget Control Act of 2011, which instituted more than $900 in reduced agency budgets over 10 years and set up the supercommittee to trim as much as $1.5 trillion over the same length of time.

Elizabeth Ferrell, a partner at McKenna Long's government contracts practice, is taking part in a webinar to educate contractors on the latest federal budget issues and how to navigate them.

Ferrell joined the Federal Drive with Tom Temin and Amy Morris to discuss what contractors are already feeling in the wake of the Budget Control Act.

"They are already feeling the pinch. Agencies have already been called upon to reduce their procurement budgets - and that's both internal costs for the agencies and external costs for the contractors," Ferrell said. "So, we're seeing that there are fewer government resources available for the administration of government contracts and we're also seeing that the government is trying to impose cuts on current procurements. They're asking everyone to trim back. "

So, how are contractors coping?

Ferrell said contractors realize business-as-usual is over. Companies are now assessing their vulnerabilities, decreasing costs and, even, laying off workers, she added.

The goal is to reassess their priorities, Ferrell explained, and determine those areas where the government will continue to spend money.