Long-Term Funding Agreement Critical for Contractors, Industry Groups Say

Key Takeaways for Executives

  • The three-week agreement to reopen the government is an “important first step” toward longer-term funding stability.
  • Contractors should promptly submit, and the government should promptly pay, outstanding invoices for work already performed.
  • Contractor employees should receive back pay along with their federal counterparts.

The Professional Services Council said the agreement to reopen the federal government until Feb. 15 is “a critically important first step” toward a long-term solution, but that more work is needed to ensure contractors and their employees have better job security.

The temporary agreement “shows the beginning of finding common ground to a longer-term agreement,” said PSC President and CEO David Berteau in a statement. “We need our government—Legislative and Executive branches alike—to use this opening to the best advantage to provide long-term funding stability.”

PSC also called for the government to promptly pay invoices for work completed prior to the shutdown, as well as provide “equitable treatment” — that is, back pay like federal employees will receive — for contract workers who weren’t paid during the shutdown.

The group said its member companies should do several things now that the government has reopened, including quickly catching up on work, submitting claims for unpaid work already performed and submitting overdue unpaid invoices.

PSC Vice President and Counsel Alan Chvotkin told WashingtonExec contractors should submit their outstanding invoices and claims as soon as possible because they will take a while to process. He also reiterated the importance to contractors of regular appropriations bills that provide long-term funding, both for day-to-day operations and recruiting.

“It’s hard to ask someone to come work for you and then have to say, ‘But there’s no guarantee your contract will get funding and I might have to suddenly lay you off without pay,’” he said.

AIA Welcomes Short-Term Agreement

In a statement, the Aerospace Industries Association said it welcomed the short-term government funding agreement to “restore stability to the hundreds of thousands of federal employees and supporting contractors who bore the unacceptable burden of the shutdown.” However, like PSC, it said the agreement is “a temporary response to a problem that needs a lasting solution.”

“This deal is an important first step, but our country can’t afford continued uncertainty,” President and CEO Eric Fanning said. “Every day that we operate under a continuing resolution shortchanges taxpayers, threatens the financial security of many American families, and disrupts industry’s ability to provide vital capabilities for our safety and security.”

AIA said the remaining appropriations bills include critical funding for space systems and the Next Generation Air Transportation System. All of these need full fiscal year 2019 appropriations to avoid another shutdown, which will impose more delays and costs, the group said.

The government also should find a solution that “provides redress for the federal contractors who work together with government counterparts every day,” the statement said.

“Countless businesses, government employees, private contractors, and communities have already been harmed by the government shutdown and resulting delays in important government initiatives,” Fanning said. “We all need our elected leaders to find a long-term deal, not kick the can again.”

RAND Corp. Questions Impact of CRs

According to a new report from the RAND Corp., it is commonly thought that operating under continuing resolutions at the beginning of a fiscal year, which has become the norm for the past several years, has led to delays and increased costs in Defense Department weapon procurement. However, the report questioned this assertion.

“Overall, the results of the analysis do not provide strong evidence that CRs are associated with delays in weapon procurement awards or increased costs,” the report summary said. “This includes selected specific instances … in which DoD explicitly expressed concerns that these effects would result.”

But RAND hastened to add that because of various limitations of its analysis, the report “should not be interpreted as a finding that concerns over operating under a CR are misplaced.” Instead, it “should be considered a first, limited step in analyzing the consequences of operating under a CR.”

More research is needed to analyze the challenges CRs present and how to mitigate them, it said.

Related: Shutdown Threatens Status of Contractor Employees on H-1B Visas

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