Contractors Pause Sequester Plans

 With FY13 Funding Still Uncertain, Contractors Pause Sequester Plans
Todd Jacobson – Weapons & Complex Monitor
March 15, 2013

Massive across-the-board cuts still loom for the weapons complex, but contractors have appeared to pause any implementation plans until early next month. While weapons complex contractors have made various plans to deal with the cuts, with the potential impacts ranging from furloughs and layoffs to nothing, the added uncertainty of a Continuing Resolution that expires March 27 has driven contractors to take a wait-and-see attitude on implementing any plans. Nowhere is that more evident than at Lawrence Livermore National Laboratory, which could be among the hardest hit of any NNSA site by the sequestration cuts. The lab has said it is facing a $120 million shortfall because of sequestration, and has said it will use a salary reduction and closure day plan to address the shortfall. Livermore Director Parney Albright could have pulled the trigger on the plan this week, but chose to wait until April when full-year funding will be more clear.

The House has passed a full-year CR for Fiscal Year 2013 that includes an anomaly that would boost funding for the NNSA’s weapons program, and the Senate is expected to clear its version of a CR early next week. Despite the possible good news for NNSA in the CR, the agency’s weapons program is facing approximately $600 million in cuts under sequestration, while its nonproliferation account is facing a $250 million cut, officials have said. In a message to lab employees late last week, Albright cited “uncertainties surrounding the details of the continuing resolution deadline of March 27” as well as sequestration impacts and other factors as a reason to “wait until more clarity was provided from Washington, D.C. on the fiscal impact to the Laboratory.”

Livermore’s plan to address the budget shortfall would include temporary 10 percent salary reductions and bi-weekly closure days for full-time employees. Those closure days would come every other Friday, when the lab would operate similar to how it runs on a weekend. The impact to other sites has been varied. While the Y-12 National Security Complex and Savannah River Site have said that furloughs are a certainty, contractors at other sites like Los Alamos National Laboratory, Sandia National Laboratories, the Nevada National Security Site, the Pantex Plant, and the Kansas City Plant have not made any decisions about furloughs or layoffs…

DOE, however, sent letters last week to the governors of key states that house DOE sites, suggesting there could be impacts at variety of DOE sites… At Pantex, Deputy Energy Sec Dan Poneman said 2,500 furloughs or layoffs could be needed to absorb a $22 million cut to DOE contractors across Texas, while he suggested DOE contractors in Nevada were facing cuts of approximately $32 million, which could result in furloughs or layoffs for approximately 370 workers. Poneman said that a cut of approximately $61 million for Los Alamos National Laboratory would result in layoffs or furloughs for approximately 8,200 lab employees…

While the implementation schedule remains uncertain, acting NNSA Administrator Neile Miller reemphasized this week that the impact of the cuts would be dramatic at the agency. “I think people have a tendency to look at sequestration in terms of numbers of people that might be furloughed or dollar numbers that might be missing…What is of deeper concern, at this point, is the ongoing disruption to activities that will take projects and programs and make them difficult, if not impossible, to actually execute anywhere near to the plan and to the price and to the need that has already been described. It’s that ongoing uncertainty, disruptions and then lack of ability to plan.”