The Federal Government has specific instances when they can withhold payment of money owed to Government Contractors. Many companies that are in the business of government contracting do not fully realize what this means and they can be surprised when they do not receive the full amount they are due at the time they think they are due the funds. After all, the Federal Government is the world's largest purchaser of goods and services and have an excellent credit rating. There are costs associated with dealing with this customer, however.
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Sequestration is now a reality. OK, a 5 to 10% cut across the board and no big deal, right? Who hasn't had to deal with a 10% cut in business and managed to make the adjustment? If that was all that was asked, I don't think there would be this much complaining. The real issue is the compounding of several events. It started in 2010 when the Defense Department announced they would trim $100 Billion from their budget over the next 5 years. Then came the Budget Control Act in 2011 that required the Defense budget be cut by $487 Billion over the next 10 years. Add to that the recent pressure to reduce the budget for 2013 and 7-10% Sequestration cuts across the board. Not to mention the continuing resolution, which is still looming, that threatens to reduce the 2013 proposed budget further. I just saw today where congress is considering a plan to reduce the effects of sequestration by replacing it with a "more responsible" spending cut plan that could soften the blow in the DOD.