Contractors brace for debt debate outcome

By Jack Moore
Federal News Radio

Experts say federal contracting could take a hit if Congress doesn’t raise the debt ceiling by Aug. 2. The Treasury Department contends that if Congress and the White House don’t agree on an increase, the government would be unable to pay its bills.

As the debt ceiling debate comes down to the wire, one contracting expert told Federal News Radio that contractors and agencies must work to keep the lines of communication open.

“What we’re going to have to do in this whole situation, in my opinion, is that we’re going to have to work closer together,” said Alan Boykin, chief learning officer at the National Contract Management Association. “We’re going to have stay close with our counterparts in government as well as in industry so that everybody understands what’s going on.”

Specifics on how a government default would impact federal agencies and government employees are hard to come by – let alone for contractors.

Boykin said contractors would likely continue “business as usual” in the meantime. “But at the very same time, they’re going to have to be cognizant and educated on the parameters and risks of where we are at this stage that may impact their particular lines of business,” he said.

For example, in the event of budget shortfalls, there may be redefined requirements.”So we may have to change some things along the way but, for the most part, it’s really just staying close to the situation and everyone understanding what is currently going on and what the dynamics will be,” he added.

So far, Boykin said he hasn’t heard any specific instances of agencies warning contractors about program interruptions or re-negotiated rates.

But the near-crisis mentality pervading Capitol Hill, federal agencies and board rooms in Northern Virginia is “not a drill,” he said. “it’s a reality.”

“I think it’s a reality in the sense that we can now look to adopt better practices and initiatives to help us become more efficient down the road,” he added. “And that’s good for everybody.”

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