Sequester scenarios: DOE contractors in Tennessee could furlough 1,400, lose $90 million

The federal funding cuts that went into effect March 1 could result in 1,400 furloughs or layoffs for U.S. Department of Energy contractors in Tennessee, an official said this week. The furloughs could start as early as April 1.

There could also be spending reductions of about $90 million for DOE contractors in the Volunteer State, DOE Deputy Secretary Daniel B. Poneman said in a March 5 letter to Tennessee Gov. Bill Haslam.

Funding for contractors at the Y-12 National Security Complex in Oak Ridge could be cut by roughly $41 million, and more than 1,000 contractor employees could be furloughed, Poneman said.

He said DOE’s overall budget has been reduced by nearly $1.9 billion through Sept. 30 due to the spending cuts, also known as sequestration. Part of a highly criticized 10-year spending reduction plan approved by Congress and the president in 2011, the sequestration could cut a total of $85 billion in discretionary domestic and defense spending through the end of the fiscal year.

“While these reductions are unfortunate and will be damaging, the department is doing everything within its power to protect our mission to the greatest extent possible,” Poneman said. “Accordingly, we are prepared to work to manage these reductions to the extent that we can.”

He said DOE’s preliminary analysis could change “as we seek to manage reductions across the department’s complex.”

Poneman said DOE is reallocating money from long-term work to limit the short-term impact of sequestration. So, the impact of a prolonged or permanent sequestration could be even greater than the one expected through the end of this fiscal year, Poneman said.

Y-12 announced in late February that its work week could occasionally be reduced to 30 hours for many employees between April and October as part of a budget-cutting plan announced on the eve of the sequester. Under that proposal, nonessential personnel could work three 10-hour days rather than four 10-hour days every third week.

In mid-February, Democrats on the U.S. House Appropriations Committee released a report that said sequestration could lead to furloughs for 700-1,000 of Y-12’s 4,500 employees for up to six months. But in a Feb. 28 message to employees, B&W Y-12 General Manager Chuck Spencer did not identify the number of employees that could be affected by the April-October furlough.

Poneman said certain impacts to DOE subcontractors in Tennessee could be significant, but they were not included in the estimate he sent to Haslam.

The sequester has been reported to have an estimated impact of up to $100 million in spending cuts at Oak Ridge National Laboratory—which has said it is as well-prepared as it can be—and $23 million in cuts at the Tennessee Valley Authority

Still, local officials have said the impacts of the cuts could vary depending upon how funding is allocated.