While the media highlights the government shutdown’s impact on the 800,000 federal employees, it seldom covers the impact to federal contractors, who represent approximately 3 million people who often sit side-by-side with their federal counterparts and work diligently to support agency missions. Considering this, I want to thank Francis Rose for the opportunity to join him on Government Matters last Thursday (full episode here), and for spotlighting the significant impact this shutdown has had on federal employees, federal contractors, and the long-term mission of federal agencies.
The contractor workforce that supports federal agencies is approximately 2 to 3 times the size of the direct federal workforce which has been impacted, meaning the number of people impacted is far greater than 800,000. While federal employees have now been guaranteed to be made whole on the lost pay they have suffered, federal contractors, who have not been able to work for the last three weeks, have not been offered a similar guarantee. There are some federal contracting firms who will pay their employees out of overhead, even when the federal government will not pay for them. They do this out of loyalty to their employees and to retain these valuable resources. However, smaller firms that cannot afford paying salaries out of their margins usually force their employees to take vacation or sick leave. When that is all used up, they are forced to put their employees on unpaid leave. This situation eviscerates employee morale, damages these small firms’ ability to keep their talented employees, and creates liability and legal concerns which may be too expensive for these small firms to bear.
Unfortunately, and what most folks are not talking about, is that the smallest of firms may run through their entire year of profits and margins just to survive this shutdown. In effect, they will be working the rest of the year for free; the consequence of this is not only going to be felt by the contracting community, but it will have a long term impact on agency missions. Small and innovative firms will choose to prioritize private sector work as opposed to supporting federal operations to make up the gap. Talented professionals will be drawn away from federal work, resulting in a brain drain with lasting impact.
As we seem to be experiencing more and more shutdowns, Congress needs to address this problem by not only solving this particular instance, but by creating legislation and safety nets for federal employees and contractors. Safety nets that will support workers and contractors in the case of a shutdown, and which can serve as a deterrent to future shutdowns. Furthermore, the Office of Management and Budget should immediately issue guidance to all federal agencies to prioritize payments to small businesses as soon as the shutdown is over.
As I mentioned on the show, I serve on the Montgomery County Chamber of Commerce’s GovConNet Council, which is a voice for local government contractors, and I am also a member of the HUBZone Contractors National Council which advocates on behalf of HUBZone contracting firms. Both of these organizations have been active in making the voice of contractors heard in the chaos of the shutdown, and both have been pushing for fair treatment of federal contractors as a consequence of the impacts of the shutdown. Further, my own firm, GovContractPros, will continue to advocate for small businesses throughout the duration of the shutdown and afterward. If your firm is experiencing difficulty due to these extenuating circumstances, please reach out to us for support.
GovContractPros helps government contracts access the $500 billion federal marketplace through proven expertise. The GovContractPros mission is to ensure the prosperity of our clients throughout all stages of their growth and development. We collaborate with clients to develop effective business strategies, provide education and advocacy services, and work to facilitate access to government contracting opportunities, while leveraging small business contracting programs. For more information on offerings, visit www.govcontractpros.com.