The Office of Management and Budget (OMB) has directed federal agencies to step up their planning efforts in preparation for implementing a possible sequester.
In a memo to agency heads, Acting Director Jeffrey Zients told agencies not to slow their planning for a possible sequester just because the recent Taxpayer Relief Act has delayed implementation for two months. Due to continued budget uncertainty, Zients told agencies not only to continue, but to “intensify efforts to identify actions that may be required should sequestration occur.”
OMB guidelines to agencies for plans to operate with a lower level of resources include: reducing civilian workforce costs; determining cost savings in grants and contracts; and taking advantage of funding flexibilities, such as reprogramming and transfer authority.
The memo identified potential workforce cost cutting activities as hiring freezes, terminating temporary hires or not renewing contract hires, implementing “administrative furloughs.” OMB also told agencies to consider utilizing voluntary separation incentive and voluntary early retirement authorities.
Agencies were directed to reduce operational risks and minimize the impact on core missions when preparing plans for sequestration. Agencies should also identify “operational challenges that could potentially have a significant deleterious effect on the agency's mission or otherwise raise life, safety, or health concerns," the memo cautioned. In all cases, the OMB stressed that agency plans should consider the employee notification requirements of the Worker Adjustment and Retraining Notification (WARN) Act.
OMB instructed agencies not to take any actions at this time to implement reductions. If circumstance change and such actions are required the memo directed agencies “to coordinate closely with its OMB Resource Management Office (RMO) before taking any such actions.”
Last week DoD Secretary Leon Panetta said he had no choice but to prepare for what he called “a perfect storm of budget uncertainty.” He was referring to the possibility of 1) a debt ceiling crisis [at the end of February] that could weaken the economy; 2) a sequester being implemented on March 1; and 3) a continuing resolution (CR) set to expire on March 27 that could be extended for the entire year. He directed the military services and defense components to take “prudent measures” to ensure that they are able to accomplish core missions.
The DoD guidance complies with that issued by OMB. Panetta directed military services and components to consider freezing civilian hiring, terminating temporary hires, curtailing travel, training, conferences, and administrative services, and to review contracts for possible savings. He also said DoD should develop plans to implement civilian unpaid furloughs if sequestration goes into effect.