Over the last few months federal spending cuts, budget restraints and federal contracting’s favorite word, “sequestration,” have been on everyone’s mind. This past week a new word was invented to describe the current budget climate: “Snowquester.”
WashingtonExec reached out to area executives in the federal contracting space to share their insights regarding how this uncertain budgetary climate is impacting their customers, business, as well as future initiatives.
Today’s insights are from Veeral A. Majmudar, President & CEO of Savan Group:
WashingtonExec: How has sequestration impacted your customers?
Veeral Majmudar: Sequestration has had a negative impact on our customers’ ability to operate at a strategic level. As a result of sequestration, much of the attention has been focused on making tactical changes to everyday operations in order to prepare for impending cuts and ensure continuity of operations. When a customer has to reallocate resources to focus on those types of activities, there is significant opportunity cost in the form of neglecting the long-term program goals and mission objectives. In other words, many customers are simply worried about getting through the week and not focused on delivering their services in a manner that meets their long term goals and objectives. Simply stated – you cannot plan for the long-term.
WashingtonExec: How has/will sequestration impact your overall business?
Veeral Majmudar: From our perspective, sequestration has forced us to reevaluate almost every aspect of our business including the manner in which we deliver services, the investments we make in our employees, and other facets of our business. First and foremost, we’ve had to work with several of our clients to help them navigate the various consequences that might occur if budget cuts were to impact their specific program. Second, we’ve had to prepare for the potential of cuts impacting the scope of our own contracts. Hence, we spend a substantial amount of time evaluating various resource models and staffing approaches to ensure we can continue to achieve our client support goals while facing cuts to our specific contract.
WashingtonExec: What is your personal view of sequestration?
Veeral Majmudar: To put it bluntly, it was a completely avoidable crisis. There is no question, on either side of the isle or with the American public, that efforts need to be made to identify opportunities to reduce federal spending. However, across the board cuts (as the phrase goes) are irresponsible and really goes against the very idea of making our government more efficient. You’ve basically asked agencies and departments to reduce their budgets without any evaluation of risks or consequences. That type of careless approach with no consideration given to how to appropriately make those cuts will ultimately lead to operational inefficiencies within specific programs resulting in failures to adequately deliver services to the American public. If you want to reduce government spending, you have to understand that each agency, each program is not weighted equally in terms of its value or impact. Therefore, a blanket, across the board cut, is not the appropriate solution.
Read Majmudar’s 2013 market outlook here.