Coping with Government Budget Cuts, Part II
Winter 2012

The first part of this article, appearing in the Fall 2011 issue of the PACA Pulse, noted that reductions in discretionary spending by the federal government are on the way and that these cuts are expected to hit the Department of Defense the hardest. Contractors need to be ready for reductions in spending. While many of these reductions will result simply in fewer contracts being awarded, existing contracts may also be affected.

This article addresses the government’s rights and obligations under those contract provisions that may be used to implement budget cuts, and contractors’ rights and obligations in responding to government action under these contract provisions. The first part of the article discussed government action pursuant to provisions concerning contract funding, contract payments, and government delay of work. This second part addresses government action under contract provisions concerning government orders to stop work, contract changes, and termination.

To read the full article, please click here. 

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