Continuing Resolution Provides DOD Some Flexibility During Sequestration

On March 26, President Obama signed the continuing resolution (CR) that will fund the federal government through Sept. 30, 2013. The funding measure includes spending cuts that were part of the $85 billion in across-the-board cuts under sequester, but allows some agencies to move funds around to different accounts, providing a limited degree of agency flexibility. For example, the Department of Defense (DOD) will reduce the number of furlough days civilian employees will be required to take under the sequester from 22 to 14. Officials were able to reduce plans for unpaid leave because the CR shifted $10 billion into the Pentagon’s operations and maintenance accounts.  This should provide some flexibility for agencies like the U.S. Army Corps of Engineers (USACE), Naval Facility Engineering Command (NAVFAC) and U.S. Air Force Civil Engineer Center (AFCEC) to maintain more normal construction procurement and jobsite operations than if this part of sequester was not addressed. However, because furloughs are still expected, defense contractors should be prepared to encounter some disruptions. The CR included five full appropriations bills, including military construction. This means that DOD military construction can initiate new starts on projects. However, during AGC’s 2013 Annual Convention in Palm Springs, Calif., USACE noted that obtaining authority within DOD to begin new projects may require higher administrative permission within the agency than what is normally required. Had Congress not passed this CR, it was reported that the execution of 97 percent of the fiscal year 2013 military construction program would have been blocked under the new starts prohibition. As a result, more than 250 MILCON projects in 42 States, the District of Columbia, and overseas would be put on indefinite hold. AGC strongly supported passage of the CR and had long noted its objection and the implications of the new starts prohibition.  AGC continues to review the funding measure for its impact on sequestered federal construction programs. For more information, please contact Jimmy Christianson at (703) 837-5325 or christiansonj@agc.org.