There has been a lot said about the impact of Sequestration on not only the government departments but also on Small Business. I have seen a lot of indications that small business may be disproportionately affected by the cuts. The rationale is not only a cut in Federal Programs that some small businesses were bidding on but a cut in funds for the Small Business Administration will mean less money available for Small Business loans. Also, Federal Government departments that traditionally provided assistance for Small Business may lose staff and thus the Small Business will lose some of their "free" support that was afforded them in the past (navigating export regulations is only one example). When you combine this with the apparent delay in funding from many agencies (their way of mitigating risk of not knowing the full effects of sequester) or the reduced level of funding available on smaller contract releases the situation has made Small Businesses very nervous. When we depend so heavily on job growth from Small Business, this almost seems counter-productive to the President's mission.
I do think that there is some silver lining and the news is not quite as bleak as we have been made to believe. I went to a meeting a couple of weeks ago and heard from some procurement folks from the Air Force. They indicated that less than half of the budget had been spent and yet there is just a little over a quarter left in the fiscal year. What this means is that the government has played their cards close to the vest to see what would happen with Sequestration and other budget cuts, trying to preserve cash. Now that the impacts are becoming more clear, and time is running short in the fiscal year, it only makes sense that a lot of funds will start to flow in the next 3 months. After all, government procurement is conditioned to use the budgeted amount or risk loosing access to that amount of funding in the future. Now we do know of certain programs that will be cut and/or trimmed and if you are involved in those programs, there is reason for concern. On the other hand, if you are in a program and have not yet heard from your Contracting Officer, it could just be that the funds have been log jammed. It sounds to me that the log jam may be about to break. I would suggest that contractors in this situation contact the Contracting Officer and see if you can assess if this is your situation. So there could be a large amount of purchasing going on in the near future. Keep the faith.