The government shutdown that began on Dec. 22 has continued on into the new year, amid threats that it could last for months. The length of the shutdown has broken the previous record of 21 days, which was set during the government shutdown that extended from Dec. 5, 1995 to Jan. 6, 1996.
Much attention has been paid to the impact that the shutdown has had on government workers, as hundreds of thousand of federal employees have been furloughed or are working without pay. Yet the shutdown is impacting the livelihood of more than just those directly employed by the federal government, as many government contractors are now also feeling the pinch.
A range of responses from contractor community
How deeply a government contractor is impacted by the shutdown depends largely on the nature of their work.
"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 of Sevatec, an advanced technology company that has partnered with the government on border security and data protection.
"For some government contractors, including Sevatec, contracts are operating close to normal," Colturi said in an interview with Clearance Jobs. "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."
Whether a government contractor continues working throughout the shutdown is largely determined by whether or not their contract is deemed critical. Companies that have hundreds of individual government contracts, both of the essential and inessential variety, typically have some of their workforce operating at full capacity, and other employees working at diminished capacity.
Defense industry expressing concerns
Defense firms are among the government contractors most worried about the effect that this indefinite pause in business could have on the continuation of business as usual.
While the Defense Department has been funded for fiscal year 2019, allowing work on the military's weapons programs to continue uninterrupted, many defense companies hold contracts with agencies that have not received funding, according to Defense News. Among the agencies going without funding during the shutdown are NASA and the Department of Homeland Security, which includes the Coast Guard, Customs and Border Protection.
One notable example of shutdown consequences is the suspension of weapons sales and transfers to U.S. allies due to the closure of the State and Commerce Departments.
Now defense industry figures and lobbying groups such as the Aerospace Industries Association are advocating for an end to the government shutdown, and warning that its extension could have a negative impact on the balance of federal employees and contractors.
"There might be near-term collateral damage if people leave government service, but a 1-3 year factor to consider is how this shutdown and the potential for future ones accelerates reliance on federal service contractors," Byron Callan, an analyst for Capital Alpha Partners, said to Defense News.
Senators propose authorizing back pay for contractors
The Washington Post recently reported that a group of 34 Democratic United States senators released a letter urging federal agencies to work with contractors to provide back pay for low- and middle-income workers impacted by the government shutdown.
The senators argued that agencies have the authority to negotiate back pay for contracted employees, and therefore should act to ensure that the most vulnerable contracted workers are still paid during the shutdown.
Whether agencies will act to ensure that government contractors aren't going without paychecks, or if and when an agreement between Congress and the White House will eventually be reached, remain looming questions as the government shutdown lingers on.
