INSIDE LOOK: Impact of Government Shutdown on Federal Contracting Community

Richard Bodson, President, SUBSYTEMs

Richard Bodson, President, SUBSYTEMs

The 2013 government shutdown is now in its second week and there is no imminent sign among politicians to pass a continued resolution. Meanwhile, Lincoln sits alone in the quiet corridor of his memorial, the gates are closed at our National Parks, and several hundred thousand government employees have been furloughed.

Recently, the House unanimously passed a bill that will provide backpay to government employees for the time that they were furloughed. However, the bill neglects to address the impact to the federal contracting community, especially for small businesses.

“The shutdown is having a very significant deleterious effect on our Intelligence Community, FAA, DEA, and DoD clients. We exist for and because of these customers and their important initiatives in safety and national defense,” said SUBSYSTEMs Technologies, Inc. President Dick Bodson. “As for our company, to date 10% of the billable staff have been furloughed and while they take it in stride, it can soon become a dire situation,” he added.

Of the many duties that Congress assumes under the Constitution, one key duty is to pass spending bills that fund the government. If it doesn’t, most functions of government, such as funding agencies to paying out small business loans and processing passport requests, come to a screeching halt.

Tony Crescenzo, CEO, IntelliDyne, LLC

Tony Crescenzo, CEO, IntelliDyne, LLC

Many businesses are choosing to reassign personnel to non-government related tasks in an attempt to mitigate harm to employees. After a full week of government shutdown and no sign of an imminent resolution, one company chose an innovative and selfless solution to help its furloughed employees. IntelliDyne, LLC CEO Tony Crescenzo and its senior leadership team decided to donate their own PTO/Vacation time to avoid furloughing employees.

“In a company of 300, we were told that 14 of our employees were deemed non-essential. That represents a significant portion of our workforce and placing these employees on furlough, and putting stress on their families, was unacceptable to us,” Crescenzo said. “To lead the way, my executive team kick-started the donations and within 24 hours, company employees have collectively donated nearly 1,000 PTO hours have been contributed to cover our furloughed colleagues.I could not be more proud of my team and their sincere commitment to each other during difficult times.”

Kerri Morehart, Vice President of Human Resources at Pragmatics, Inc., said, “Right now, we are holding steady at a little less than 10% of our workforce (about 45 employees) being impacted. However, as this situation continues, we could be faced with an increase in the number of employees impacted.”

Kerri Morehart, Pragmatics

Kerri Morehart, Pragmatics

The last government shutdown occurred in late 1995 and lasted 21 days. “The total economic impact is likely to be at least 10 times greater than the simple calculation of lost wages of federal workers, said Brian Kessler, economist with Moody’s Analytics. His firm estimates that a three-to four-week shutdown would cost the economy about $55 billion.

For small to mid-sized businesses in the federal contracting community, the shutdown is a waiting game that has put employees and their families in limbo.

“Everyone wants this situation to be resolved and for us to get back to work supporting our customer’s mission. Our management team is communicating with the employees regularly to keep them posted on what Pragmatics is doing to support them and their families during this time,” Morehart stated.

“The stark reality, is as a small business, we could soon be suffering extremely harmful losses,” Bodson said. “It is critical, as a services company, that we do all possible to help our employees and teammates. We are doing everything possible to assist them, short of jeopardizing the company.”

If you would like to share your shutdown story, we encourage you to email us at info@washingtonexec.com.

 

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