Trashcans overflowing in national parks. Closed doors at the Smithsonian. Possible delays on income tax returns. But there’s one side effect of the government shutdown that’s getting less attention: its toll on government contractors.
Though many employees remain at work, thousands of government employees and contractors are facing the day-to-day struggles of not receiving a paycheck. For those with existing financial concerns, the shutdown could jeopardize their security clearances — and thereby their future employment. As Washington tries to get back on its feet, it could turn to future government contracts as a way to cut costs, adding even more uncertainty to the contractor workforce.
Thursday marks the 20th day of the government’s partial shutdown. If it lasts until Saturday, it will be the longest partial or total government shutdown in history. Though many functions such as the National Park Service or IRS are all but closed, “essential” personnel are still on the job — but many are working without pay. Thankfully, for the sake of national security, the Department of Defense is not itself affected by the shutdown. Last September, Congress successfully passed the Defense Appropriations Act, providing defense spending for fiscal year 2019.
However, the Pentagon is not the only government entity that is critical to our nation’s security. The departments of State, Justice, and Homeland Security all provide national security functions — and all are currently without appropriated funding. Although the most critical government employees remain on the job, they do so without pay.
The Department of Justice (housing agencies such as the FBI, U.S. Marshals Service, and Bureau of Alcohol, Tobacco, Firearms and Explosives) has more than 95,000 employees working without pay. Customs and Border Protection has an estimated 54,935 employees who are considered essential and are working, but whose agency currently cannot pay them.
Understandably, the shutdown is cause for concern for contractors whose work so heavily depends on government funding.
“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 said. “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.”
During the shutdown, contracted employees working on projects deemed nonessential or for unfunded agencies are the ones forced to use vacation days or take leave without pay. While government employees are at least likely receiving back pay once the shutdown ends, contractors have no such guarantees.
“There is tremendous uncertainty of how long this shutdown will last,” Colturi said. “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.”
Many of these furloughed government contractors serve in positions of trust with the U.S. government and therefore require security clearances for their positions. Acquiring a security clearance is a lengthy process that requires applicants to reveal an intense level of detail about their families, finances, and private lives.
Year after year, financial concerns top the list of reasons why a security clearance may be denied or revoked, and 2018 was no exception. The government reasons that intense debt may be evidence of poor judgment or grounds for blackmail from a foreign power. Losing a clearance can render a person essentially unemployable in their field.
Now the government has continuous access to the credit reports of thousands of security-cleared employees. That means that any serious financial concerns will automatically pop up on Uncle Sam’s radar. Security clearance holders have good reason to be concerned that financial hardships brought about by the shutdown could affect their security clearance.
“Generally speaking, a security clearance holder should be concerned any time she or he gets into financial difficulties,” notes security clearance attorney Sean Bigley. “Accounts in collections or ‘charge-off’ status, repossessions, foreclosures, and similar issues can all be viewed by the government as evidence that the clearance holder is not living within their means or is demonstrating a lack of personal responsibility incompatible with expectations.”
Since the government takes into account the “whole person” concept when granting or revoking clearances, financial issues directly related to the government shutdown should not put their security clearance in jeopardy, however.
“Circumstances beyond the clearance holder’s control — for example, a government shutdown — are most always viewed as mitigating details, provided the clearance holder acted reasonably under the circumstances,” Bigley said.
The caveat, however, is if the government shutdown only serves to worsen a pattern of financial irresponsibility. Clearance holders who are habitually late paying bills, even before the government shutdown, are most likely to run into trouble. If someone has a pattern of being 30-60 days late making payments, and the government shutdown exacerbates this problem, the effect on an employee’s credit score could be significant. This dip could invite Uncle Sam’s scrutiny — a worrisome thing for any security-cleared contracted employee.
Caroline D’Agati is an editor at ClearanceJobs.com, the largest online community and news site dedicated to the security clearance process and career concerns of national security professionals.
