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Sequestration planning must intensify, says OMB

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A two-month postponement to the onset of sequestration means agencies must intensify their preparation efforts, says the Office of Management and Budget.

A last minute deal between Republican lawmakers and the Obama administration prevented across-the-board cuts from coming into effect Jan. 2, but the measure signed into law still holds the prospect of $85 billion in cuts, OMB Acting Director Jeffrey Zients notes in a Jan. 14 memo (.pdf).

Agencies face additional uncertainty in this year's spending thanks to an appropriations measure known as a continuing resolution that's set to expire on March 27.

Among the steps agencies should take are identifying "the most appropriate means to reduce civilian workforce costs" such as not renewing the employment terms of temporary or contract hires and implementing furloughs. The Office of Personnel Management has posted online high-level guidance about furloughs.

Other steps agencies should take include reviewing grants and contracts to "determine where cost savings may be achieved" and determining where any funding flexibility may exist.

Zients' memo comes days after the Defense Department issued guidance in a Jan. 10 memo (.pdf) signed by Deputy Defense Secretary Ashton Carter. He likewise calls for Defense agencies to be ready to end the employment of temporary workers and to look for savings in contracts.

Carter also says that DoD may need to cancel ship-, aviation- and ground-depot maintenance during the second half of the fiscal year, but says the earliest cancelation orders should go out is Feb. 15. The memo also calls for the undersecretary of defense for acquisition, technology and logistics to review all research and development contracts worth more than $500 million.

For more:
- download Zients's Jan. 14 memo (.pdf)
- download Carter's Jan. 10 memo (.pdf)

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