ISS lays off 40, blames funding delays due to sequestration

March 18, 2013
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Intelligent Software Solutions Inc. laid off 40 employees after funding under an Air Force Research Laboratory contract was delayed because of automatic federal budget cuts known formally as sequestration.

The layoff is the first in six years by the Colorado Springs-based military information technology contractor, which now employs nearly 750 at its headquarters and offices in Florida, Massachusetts, New York, Virginia, Washington, D.C., Afghanistan and various military bases. Under the contract, ISS is adding new capabilities to its flagship data integration, analysis and reporting software called WEBTas.

The layoff was "a direct result of sequestration. (The laboratory) decided to hold onto the money, which was funding the salaries of a large group of people for the rest of the fiscal year. We don't know if the cuts are temporary or permanent," ISS CEO Jay Jesse said Monday. "These are good and talented people, a mix of program managers, engineers and testing personnel. We would like to be able to bring them back if the funding situation changes."

The automatic budget cuts were part of a compromise agreed to in 2011 to raise the nation's debt limit and are split evenly between the Department of Defense and civilian federal programs. The cuts were scheduled to begin Jan. 1, but were delayed by two months under a last-minute deal to avoid the so-called "fiscal cliff" of automatic federal budget cuts and expiring of federal income tax cuts.

ISS generated nearly $200 million in revenue last year and last month won two major contracts – a five-year, $593 million agreement with the Air Force Research Laboratory affected by last week's funding delay and a five-year, $249 million deal shared with Lockheed Martin's Colorado Springs operation that will allow both companies to compete for command, control and information services tasks.

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