Alan Chvotkin, executive vice president and counsel at the Professional Services Council, gives his initial analysis of the FY20 budget request and what impact it will have on contractors.
The proposed Fiscal 2020 budget released by the White House this week is being analyzed by experts and contractors. Some of the standout details can be found in the Defense Department’s request, including one of the largest Overseas Contingency Operations budgets ever. Alan Chvotkin, executive vice president and counsel at the Professional Services Council, says that passing the enormous defense budget will require Congress to make some big adjustments. “I think the overall spending levels for defense has a good chance of getting through, although not in the form. Not with the heavy emphasis on the Overseas Contingency. I think a fair amount of spending increases in the civilian agencies are also likely as well. What that means is there’s going to have to be at least a one-year modification of the budget control caps,” Chvotkin said. “Not too far in the background is the issue of the debt ceiling. Congress reset that as of March 1… so right now the government is operating on essentially a cash basis. That can’t last for very long, maybe through the end of the summer. I think tied with the budget will be an agreement on the debt ceiling and hopefully that will find a pathway toward a two-year agreement for the Congress and the agencies.” Chvotkin says that the 2020 request has some noticeable differences from prior years, and that means that contractors and agencies have some things to think about. “I think there are two lessons to be learned from this. First of all, you’ve got to harvest what you can in the current fiscal year because agencies have more money now than they have capabilities to spend it. Some of that may carry over into the next year,” Chvotkin told Government Matters. “Secondly, they ought to be prepared for less. You’ve got to go find ways to support the operations and support the agencies with doing less and maybe those are program redesigns, maybe it’s charging less for some programs. But I think the contractors should not expect to see the same level of spending in federal fiscal year 20 that they did in fiscal years 18 and 19.”