Werfel added, “Agencies may also consider de-scoping or terminating for convenience contracts that are no longer affordable within the funds available for fiscal year 2013, should no other options exist to reduce contracting costs in these instances.”

The sequester kicked in after Obama and congressional Republicans were unable to agree on a plan to cancel the mandatory cuts and find other ways to reduce the overall federal deficit. The president proposed a combination of revenue increases from tax hikes and other spending reductions; GOP leaders rejected the tax-increase idea.

The next critical fiscal deadline is March 27, when a part-year appropriations measure funding all government operations expires.  Obama said he would support a follow-on “continuing resolution” (CR) to keep agencies operating through September. “I think it’s the right thing to do to make sure that we don’t have a government shutdown.”

He also indicated he wouldn’t fight that new CR even if it also continued the sequester’s cuts.

In the meantime, the sequester’s reductions are in place. Defense discretionary accounts are sliced by 7.8%; nondefense discretionary line items are trimmed by 5%, according to OMB.

Major nondefense construction cuts include: Corps of Engineers construction, $250 million; EPA water infrastructure (state and tribal assistance grants) $210 million; and State Dept. embassy security, construction and maintenance, $79 million.

Cuts to defense construction programs include: Army construction, $408 million); Navy and Marine Corps construction, $297 million; Air Force construction, $151 million; and Dept. of Energy defense environmental cleanup $393 million.