Fairfax, VA – 4 Jan 2019 -What began as the third shutdown of the Federal government in 2018 became the first shutdown for the New Year. The partial government shutdown began just before Christmas. While several meetings have occured between congress and the White House, the President has stood firm with demands for $5 billion to build a proposed border wall. The House and Senate both adjourned Friday and won’t be back in session until Tuesday, and the shutdown will drag into next week at least. As a result, hundreds of thousands of federal workers will be left without a paycheck.
But it isn’t just government workers that will feel the pinch. Shutdowns also affect government contractors.
“The government shutdown has certainly created anxiety throughout the contractor community, but the impact is very different for each contractor depending on which government clients the contractor serves,” said Mark Colturi, executive vice president at Sevatec, Inc.
“For some government contractors, including Sevatec, contracts are operating close to normal,” Colturi told ClearanceJobs. “In other circumstances, government contractors have been issued stop-work orders, which can be very difficult on employees who may have to take vacation time or leave without pay.”
The degree of severity of a shutdown for contractors can vary based on the type of work they are tasked with performing.
“It is different from agency to agency and even variable based on individual contractors,” explained Paul Wilkinson, executive vice president for corporate strategy and business development at the 1901 Group.
“If a contractor performs a mission critical role it is deemed essential, and there is funding on that specific vehicle and we will continue to work until there is no funding on the contract,” Wilkinson told ClearanceJobs.
1901, which has hundreds of individual government contracts that are both essential and non-essential, is just one example of a contractor affected by the shutdown.
“We have some working at full capacity, but others that are working at a diminished capacity,” Wilkinson added. “If there are non-essential positions then we’re not supporting the customer, which in this case is the government.”
FUTURE PROGRAMS IN JEOPARDY
A prolonged shutdown can affect future contracts, as well. One particular program is the already hotly debated Joint Enterprise Defense Infrastructure Contract (JEDI). Tension has surrounded the Pentagon’s lucrative $10 billion cloud contract. Former competitor Oracle filed a lawsuit against the Department of Defense last month, arguing that the structure of the single-vendor terms of the contract was weighted in favor of Amazon Web Services, the largest provider of cloud services.
It’s just one, very major contract that could see delays and incur additional scrutiny as the government evaluates what’s essential – and what isn’t.
“When resources are scaled back during a government shutdown, officials are driven to evaluate where those funds are going,” said Sash Sunkara, CEO and co-founder of RackWare.
“They begin to scope out areas where they could scale back with a critical eye,” Sunkara told ClearanceJobs.
This JEDI situation is only made worse by the shutdown. It could bring further delays or give pause to the contract, and perhaps prompt the government to take another look at a multi-vendor solution.
TAKING ADVANTAGE OF THE DOWNTIME
As the shutdown continues many contractors could be faced with an unpaid extended holiday. But some companies are making good use of the downtime.
“We take this as an opportunity to execute a training plan, and keep the employees up to speed,” said Wilkinson. “Then the employees are ready to return to regular work when the shutdown ends.”
Not all contractors are so fortunate as to keep busy during a shutdown, however, and unlike federal employees contractors can feel the pinch in other ways.
“There is tremendous uncertainty of how long this shutdown will last,” said Colturi. “Unlike federal workers, some contractor staff likely will have no opportunity to receive back pay. In addition, there are constant questions about processing contract invoices, timely payments, new procurement delays, and general management and technical issues.”