Editor’s note: For contractors, this spring may not be so pretty

I thought a budget deal in Congress was supposed to be a good thing.

Lately, I’m not so sure.

Business has been slow to build for government contractors in the months since Congress put the bludgeon of sequestration back on the shelf, at least temporarily. For months, we were told agencies were holding off on spending decisions because of the uncertainty over the budget process. Now, it just seems they are plain cutting back.

Bloomberg reported recently that Pentagon contracts fell 11 percent in March, a drop it attributed to program reductions and the pullback in Afghanistan.

In a sitdown at the Economic Club of Washington, Northrop Grumman chief executive Wes Bush said the industry has weathered such cycles before, but rarely at a time when the threats are so varied. Will Ukraine grow more unstable? Where might the next terror attack erupt? He fretted about how much of the budget balancing is being done at the expense of discretionary programs.

“We’re in a different place today,” Bush said.

In a conference call with analysts recently, the chief executive for McLean-based Science Applications International Corp. said it might not be until the end of the fiscal year before business rises above 2013 levels.

“Like our peers, we have not seen a lot of the activity” in contract awards in the first two months, said Anthony J. Moraco, according to a transcript.

The hangover from a year of budgetary gridlock, government shutdowns and other inaction has been a doozy.

To cope with slowdown, many companies have had to cut personnel. In February, hiring in the professional services sector was the lowest since the government started keeping track.

You hear a lot of companies talking about head winds these days. Don’t expect these April showers to bring May flowers.

Dan Beyers is the founding editor of Capital Business, The Washington Post’s go-to source for news about the region’s business community.
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