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Robert Hale: Contract Cancellation Fees Minimal Under Sequestration

Robert Hale

Defense Department Comptroller Robert Hale does not see the Pentagon having to pay large cancellation fees on contracts if cuts under sequestration affect fiscal year 2013 funds, Reuters reports.

He told members of the House Armed Services Committee Thursday most contracts signed before Jan. 2, 2013 — the start date of sequestration — would not need to be renegotiated as the cuts would not affect funds already obligated, according to Andrea Shalal-Esa’s report.

According to Hale, the Pentagon faces $52.3 billion in fiscal 2013 spending and every line item in its budget is subject to a 9.4 percent reduction under sequestration, adding military personnel accounts are exempt from the steep cuts.

Mike McCord, principal deputy defense undersecretary, told a separate House Small Business Committee hearing the Pentagon would use its authority within contracts to buy less as opposed to renegotiating contracts, the report said.

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