Yes, I work for a federal contractor and we do this to people because we can.

Yes especially in today's economy.

I interviewed yesterday for a position on a contract that doesn't exist yet (the project manager said that they were still working on it, and might not get it because of sequestration). If they do get it, the new hires for the project wouldn't be able to working until June or July. I'm new to contracting - is this normal?