August 16 2013 Copyright (c) 2013 Business Research Services Inc. 301-229-5561 All rights reserved.

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  • Small federal vendors getting hit
    Sequester, ‘paralysis’ taking a toll; morale hurting

    It’s been mostly a summer of discontent for large and small federal contractors as a result of sequestration, according to a new survey.

    More than half (55%) the federal contractors surveyed said government currently is “in a state of paralysis” with respect to contract awards; also, 68% said there has been a decrease in awards, and 65% reported a decrease in opportunities to bid on, thus far in fiscal 2013.

    Many of the vendors said they had experienced significant negative effects from sequestration, including 44% who said their companies laid off workers.

    Others reported that sequestration resulted in fewer contract opportunities (57%); terminations or reductions of contracts (48%); stopping of hiring (47%); reduced travel (42%); lower earnings (41%); and reduced training (34%). Just 15% saw no negative impact.

    The non-scientific survey of 659 federal contractors by Federal News Radio outlined a fairly bleak procurement landscape in recent months. While the results were not meant to be a statistically accurate representation, they did provide a view of current attitudes.

    About 44% of the respondents had annual earnings under $49 million, the smallest size available. About half were in defense. The survey was available online to self-selected vendors.

    Was sequestration’s threat worse than the reality? There were 40% who disagreed, 25% agreed and 24% somewhat agreed, and 55% cited greater concern about FY2014 and beyond than this year.

    Asked how contractors are preparing for more budget cuts, 63% said they are reducing salaries and benefits; 38% are looking at joint ventures; 36% are cutting technical experts; and 28% are cutting sales and development staff.

    Nearly half (49%) said they are reducing marketing, advertising, conferences and promotions during sequestration; 60% reported poor morale, and most blamed it on sequestration.

    More information: Federal News Radio survey http://goo.gl/d3kfRr


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