University of Baltimore’s Charles Tiefer has proposed multiple solutions to help agencies save money in the face of sequestration. Tiefer believes that there are things each agency can do now to save money lost in unnecessary contracts, in order to avoid furloughing government employees.
One of his suggestions is to terminate parts of existing contracts, while asking for the contractor’s input to complete the remaining work. If the partial termination of contracts would lead to litigation, Tiefer recommends the use of deductive change orders and modifying some of the specifics of each contract. His recommended proposal rests on the ability of both the contracting agency and contracting company to agree to changes in the contract. Tiefer believes that these bilateral modifications will benefit both sides of the deal if the contractors are able to help suggest new ways to perform these contracts.
According to the Professional Services Council, this outlook is inaccurate. They state that Tiefer’s report overlooks the fact that contracting companies have already lost revenue with the reductions in the federal service market. The Council’s president, Alan Chvotkin, agrees that the two groups need to work out an agreement on where to save, but thinks the proposed plan would put the nation’s financial burden solely on the service contractors.
Tiefer’s proposed solution puts contracting companies at a disadvantage. His propositions would save the government money in a more efficient way, but they come at a cost. If the government were to modify existing contracts they would put many contractors out of work, which would lead to the elimination of jobs instead of temporary employee furloughs.
The proposed plan counteracts the reasoning behind the increase in government debt. By adding to contractor unemployment, Tiefer’s plan interferes with any affect the stimulus had on the unemployment rate.
About Kevin Lancaster
Kevin Lancaster leads Winvale’s corporate growth strategies in both the commercial and government markets. He develops and drives solutions to meet Winvale’s business goals while enabling an operating model to help staff identify and respond to emerging trends that affect both Winvale and the clients it serves. He is integrally involved in all aspects of managing the firm’s operations and workforce, leading efforts to improve productivity, profitability, and customer satisfaction.
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