With $85 billion in automatic federal spending cuts that took effect on March 1 under the sequestration, contractors engaged in legal work for the feds face an uncertain future.
The reductions, which are split evenly between defense and non defense spending, won’t affect every contract. But Elizabeth Ferrell, a McKenna Long & Aldridge partner who leads her firm’s terminations and contract restructures group, said the brunt of the cuts will hit service-related contracts, which make up much of the $3.3 billion the U.S. government spent on legal work from 2008 to 2012. "It is easy to turn them off and then turn them on," Ferrell said of the service-related contracts, comparing them to contracts for goods.
