Sequestration, as written, would certainly be a mess. But it might be survivable/.../
"There won't many be terminations, if any, because of the first year of sequestration [because] no account is getting cut to zero," said Todd Harrison of the Center for Strategic and Budgetary Assessments in a recent briefing. "What you'd have to do [instead] is renegotiate the rate at which you're going to buy."
Efficiencies of scale would be lost as quantities shrank: Cutting a contract's dollar value by 8.8 percent reduces the amount the military can buy by a lot more, Harrison warned. Companies might take advantage of the Pentagon's weakened position to get better deals. And the civil servants who have to figure all this out will be subject to rolling month-long furloughs that send a seventh of the federal workforce home at any given time. So, sighed Harrison, "this is going to be a contracting nightmare."
In the worst case, the Pentagon might have to pay "termination for convenience" penalties for breaking existing contracts.