Sequestration is slated to start January 2, 2013. Under the terms of the Budget Control Act of 2011, OMB must trim $1.2 trillion evenly from the budgets of civilian agencies and the Department of Defense from 2013 through 2021, an annual reduction of $109 billion. In a report issued on September 14th, OMB started that process, providing initial estimates of what, exactly, would be sequestered from discretionary programs (i.e. non-entitlements) in the 2013 budget, including approximately $54 billion spread across the civilian agencies and $54 billion from the DoD budget, which includes a cut in funds for “overseas contingency operations,” i.e. war spending. The same requirement will continue for the next nine years. However, after 2013, the Appropriations Committees will be allowed to determine how it will apply the cuts to live within the Budget Control Act’s mandatory reduced spending caps.
In an August 2007 article entitled "Political Connections and the Allocation of Procurement Contracts," Eitan Goldman, Jorg Rocholl and Jongil So constructed an analytical model that, in the authors’ opinion, establishes an empirical link between "political connections" and the allocation of Government contracts. The authors’ conclusions are perhaps best encapsulated by the following passage from page 4 of their study:
…companies that are connected to the winning party experience an increase in their contracts upon a change in control of the House or Senate or upon a change in control of the administration, while those connected to the losing party suffer a decrease in their procurement contracts following these changes … The paper thus highlights one crucial way in which political contributions can have a direct influence on company value.
Readers are, of course, free to agree or disagree with the study, to disregard it, or to attack it premises and methodologies. The fact that the study exists, however, is probably reflective of an increasing cynicism with respect to the operation of Government as a whole. Those who have worked with the Government procurement system, whether as participants, advisors, or counselors, while no less cynical than the population as a whole – and perhaps more so in some respects – are not likely to embrace or applaud the study, or to compliment its methodological approach to a highly complex issue.
In this latter regard, we are pleased to provide in this issue a Guest Commentary relating to the above-referenced study. Our Guest Commentator needs no introduction to those whose Government Contracts experience predates the advent of cell phone technology, the internet and MTV. William P. Rudland is the former Chief Trial Attorney of the United States Air Force. Following his retirement from the Air Force, Bill practiced Government Contracts law, both in private practice and in the corporate world, and authored the well known book "Defective Pricing" (Federal Practice Press, 1990). Bill’s comments on the study are as refreshingly candid as those he reserved for unmeritorious appeals in his prior life.…