Sequestration Mechanics Under the BCA

September 18, 2012

Last summer’s debt ceiling crisis produced a compromise bill–the Budget Control Act of 2011 (BCA)–that includes an enforcement mechanism, sequestration, similar to the doomsday device in Dr. Strangelove. Like its fictional counterpart, sequestration was never supposed to be used. It was supposed to encourage political leaders to negotiate with one another to avoid a calamitous outcome. Instead, despite the best intentions of its creators (or perhaps because of their misjudgment), it appears increasingly likely that the sequestration mechanism will actually be used. And although the effects may not be as apocalyptic as those in Dr. Strangelove, sequestration could have pronounced and unpredictable adverse consequences on multiple parties, including Government contractors.

Gibson Dunn of counsel Neil Whiteman is co-author of "Sequestration Mechanics Under the BCA," published as the Feature Article in the September 2012 issue of Government Contract Costs, Pricing and Accounting Report. The article describes the process by which the BCA will reduce Government spending, how those reductions will be spread out over the two broad categories of discretionary spending, and potential areas of uncertainty as to how these budget cuts will actually be implemented.  

Reprinted from Government Contract Costs, Pricing and Accounting Report, Volume 7, Issue 5, with permission of Thomson Reuters. Copyright © 2012.