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Posted at 07:00 AM ET, 10/02/2012

Small contractor: Sequestration calls for planning, not panic

The talk of impending doom is rampant with sequestration on the horizon and the hope that Congress will prevent it at the last minute.


Congress is running out of time to block a massive round of pending government spending cuts. (Alex Brandon - AP)
It’s akin to walking down a pier with the hope that a ship arrives before you come to the end and fall right off. I firmly believe something will get done; no politician wants to risk the wrath of his or her constituents who would feel the effects of such draconian budget cuts overnight.

However, the situation does provide my small company a great opportunity to prepare for such a contingency and stress test our operational and business development processes.

Sentek Global provides command and control system engineering and cyber-security services to the Department of Defense. We help engineer and secure military information systems from hostile attack.

We’ve gone through the planning paces several times over, and here’s what we would do should the political armageddon occur:

 ●Deploy our ‘warrior engineers’ but no layoffs planned. As best as we can tell, our current contracts appear to be steady and we’ll keep our “warrior engineers” (as we call them) on the ground to see the existing projects through on time, within budget and with top customer service. Chances are, our government clients will be pulled in many different directions if they are forced to deal with sequestration, so we’ll also look for ways we can go above and beyond to ease the burden.

 ●Watch cash flow even closer. We’ll put any future investment under very careful scrutiny. It’s a prudent measure in any environment, but even more important if sequestration occurs. We’ll want to keep what we call “dry powder” cash on hand to offset any unexpected contract cancellations or delays in payments by government agencies for work we’ve already conducted.

 ●Continue our current expansion initiatives into the commercial market. This has been underway for some time, as we feel our cyber security and information assurance expertise can be of great value to a wide range of companies across many industries. It seems as if a story runs in the paper every day reporting another high-profile breach of security that exposed consumer credit card information and social media accounts. We’re getting strong interest in these areas, and are continuing to pursue the opportunities we uncover.

 Bottom line, we hope and expect cooler heads to prevail and a resolution to come quickly after the election. If it doesn’t, we can weather through a short period without making any significant changes, but will most certainly have to reevaluate our strategy if for some strange reason sequestration became the norm for a good chunk of 2013.

 There’s a larger issue here, though, that goes well beyond my company’s fortunes. The impact of the talent that will most certainly leave the defense industry for greener pastures if sequestration occurs will have significant, enduring, negative ramifications for fostering innovation at virtually every level of the Department of Defense.

Ceding these capabilities can impact national security issues over time and drive up long-term costs to maintain and improve military capabilities. This threat, while not making any headlines of late, is no less significant.

 Eric Basu is president of San Diego-based Sentek Global , providers of government and commercial information technology solutions, including security, program management, strategic consulting, engineering, software development and acquisition support. He can be reached at ebasu@sentekglobal.com .  

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By Eric Basu  |  07:00 AM ET, 10/02/2012

 
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