Subject: Sequestration--What We Know
From: KFlanagan <[email-masked]>
Date: Thu, 28 Feb 2013 20:23:12 +0000

Dear Colleagues,

All indications are that sequestration will go into effect tomorrow, March 1, and the White House and Capitol Hill will then turn to discussions about establishing a budget to keep the  government operating for at least another six months.   These inevitable budget cuts will affect many people across the country:  our clients, some of whom may be furloughed as a result of the cuts, and their families;  vulnerable populations that we care about and study, who receive benefits from government programs that will likely be reduced; and companies like ours that depend on the government for the projects we execute.

What does this mean for Abt Associates?  The short answer is,  we don’t know yet.  At this point, there are no clear plans for budget cuts to our work that have been developed or communicated by our clients.  Each agency is working to develop plans now, and we are keeping in very close contact with our clients to learn as much as possible as quickly as possible about how we will be affected.

Have we felt any effects from this uncertainty already?   Yes.   Selected markets have seen slowdowns in  RFP releases, contract awards, and funding decisions. A few contracts have had funding reductions.   Several regularly scheduled government-sponsored conferences have been canceled, such as the annual CDC 2013 HIV Prevention Leadership Summit.   We expect that we will feel more effects over the next 6-12 months.

What are we doing as a company to be prepared?

n  Staying focused on conducting our work with excellence.  I know that every one of you is concentrating on managing your projects well and with the highest quality possible.  We will continue to focus on our clients’ needs and demonstrate value through innovation, effectiveness and efficiency.  Strong customer satisfaction is essential during times of uncertainty.

n  Executing our strategy effectively.  We knew when we developed our five year-strategy three years ago that the U.S. budget would face cuts, and our market would be uncertain.  Leveraging our full company capabilities on bids to our clients and diversifying our client base both within and outside of the U.S. is an important way we are mitigating the inherent risks of such uncertainty.  This includes bidding monitoring and evaluation projects to DfID/UK Aid using skills from all of our divisions; adding Abt JTA to our company; continuing to leverage the capabilities of our survey and data collection arm, Abt SRBI; and developing deeper and broader partnerships with existing and new U.S. clients such as EPA, CDC, USAID and DOL  is vital.  Our diverse portfolio of people, projects, and clients  is our strongest asset—especially in times like these.

n   Improving cost competitiveness as an important mitigation strategy.    Following our strategic planning retreat, we established a cross-company team to work on this important topic as we gear up for proposal season. This includes carefully reviewing and managing our operating costs that make up our bidding rates and developing new strategies for developing proposal/project budgets.

I know this uncertainty is unsettling.  Your division and department leaders will communicate with you directly  as we learn more details about how specific projects and markets will be impacted.   In addition, the Contracts team will send guidance to Divisions for managing contracts during this period.  You—our staff around the world—are the most important factor in our success as a company.  I want you to know how much we appreciate your support and commitment to our mission as we work through these times of change.

Best,

Kathleen

Kathleen L. Flanagan |President and CEO | Abt Associates

4550 Montgomery Ave | Suite 800 North | Bethesda MD 20814

office: 301.634.1705 | [email-masked]  | www.abtassociates.com

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