As mandatory federal spending cuts of nearly $1 trillion loom larger, many Washington area government contractors are making bets the cuts will be delayed, and they are holding back on lowering their financial guidance to Wall Street.
With limited information from the government about how the spending reduction known as sequestration would be implemented, contractors say they are sticking with their current projections for next year.
They do not have to look far for justification. In a debate last month, President Obama said that sequestration “will not happen,” while members of Congress on both sides of the aisle have called for alternatives.
Contractors are “all pretty adamant that there’s going to be some type of deferral . . . so that sequestration doesn’t happen Jan. 2,” said William Loomis, managing director at Stifel Nicolaus, which has relationships with many contractors.
Although McLean-based Booz Allen Hamilton would not take an official stance on whether sequestration would happen, Samuel R. Strickland, the contractor’s chief financial officer, said last week he expects it to be pushed off until April.