As a result of the perfect storm created by the budget crisis, Continuing Resolutions, Sequestration, Troop withdrawals and Defense spending cuts the Defense Department announced earlier this year that they would begin furloughs for civilian contractors as well as many DoD personnel. As you may recall from my previous blogs, Ashton Carter indicated on January 10th that furloughs of up to 45 days during FY 2013 might be possible. Robert Hale indicated in a speech on February 10th that the DoD had no choice but to exercise furloughs. He also indicated that by law the government needed to provide written notice of furlough plans at least 45 days in advance for civilians and 30 days in advance for government employees. Under Secretary Hale indicated that furloughs could begin as early as April 1st for government employees. I do know that as of 2 weeks ago when I talked to an Air Force official that the official written notification had not yet been sent out. I talked last week with a DCAA employee who also confirmed that they had not yet received written notification.
It turns out that the reason there have not yet been any written notifications is because the government was dragging their feet on furloughs. Late last week the Pentagon announced that the number of furlough days was reduced from 22 to 14. That certainly is good news for Department of Defense employees. The Pentagon also announced that they are considering some areas that could be exempt from furloughs. They would not go so far as to say what areas would be exempt from furloughs but obviously they are still evaluating critical functions with respect to this cost saving measure.
Some early criticism of the reduction of furloughs include accusations that the Department of Defense may have overstated the impacts of budget cuts earlier in an effort to protect previous levels of funding. In other words, political positioning. I certainly think there is always some of that going on. I'm not convinced that we have seen all the impacts yet on these budget measures. I think there will be some furloughs and many program cuts. We don't know the full extent yet of all these actions. The good news is a reduction in the number of furlough days. I think having your contracting officer, for instance, furloughed for 20 percent would have made administration of your contract more difficult. So, for the time being, good news.