Agencies across government should “intensify” their planning for across-the-board sequestration cuts, according to a Jan. 14 memo to the heads of executive department and agencies from Jeff Zients, the acting director of the Office of Management and Budget.

The memo — which reiterates that agencies should not yet take steps to implement any budget reductions — directs agencies to continue planning for budgetary uncertainty.

That uncertainty stems in large part from from sequestration, which is slated to lop some $85 billion from the budget at the beginning of March unless Congress intervenes.

“Should Congress fail to act to avoid sequestration, there will be significant and harmful impacts on a wide variety of government services and operations,” Zients wrote in the memo, citing deep Defense Department cuts and the possible need to furlough hundreds of thousands of federal employees.

The memo directs agencies to:

• Identify “the most appropriate means to reduce civilian workforce costs where necessary,” including hiring freezes and early-retirement and early-out offers
• Review grants and contracts, while being mindful of the Worker Adjustment and Retraining Notification (WARN) Act
• Consider “funding flexibilities,” such as reprogramming or transferring funds

If any agencies must take action in the near-term to reduce spending or operations, they should work closely with their respective OMB Resource Management Office (RMO) first, Zients said.

Adding to the gloomy budget outlook is the expiration of a short-term funding measure March 27 that could presage a government shutdown.

Zients: 2014 budget process delayed

Already, the administration is behind schedule in releasing its budget request for the next fiscal year. In a Jan. 11 letter to House Budget Committee Chairman Paul Ryan (R-Wis.), Zients provided no specifics on the release of the fiscal 2014 budget, typically released in early February. Delays in the budget process were caused by the “protracted ‘fiscal cliff’ negotiations” that ended earlier this month, Zients said.

Zients’ memo comes on the heels of similar guidance issued last week by the Defense Department, which directed components to plan for civilian furloughs and other cutbacks in the event of sequestration, a lapse in congressional appropriations — or both.

Meanwhile, in a Jan. 13 message to Navy and Marine Corps personnel, Navy Secretary Ray Mabus called for immediate “belt-tightening measures” to sustain operations if Congress punts on passing a full budget and instead only extends the continuing resolution.

“Because sequestration was delayed, our focus must now shift to the impacts of the CR, which creates significant shortfalls in Operation & Maintenance, Navy (OMN) and Marine Corps (OMMC) accounts and the resultant steps we must take to maintain a minimum level of presence,” Mabus wrote in the message.

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