Linda Carr’s business faces layers of problems in the partial government shutdown. Even if federal contracts were available, she wouldn’t be able fulfill them because her workers need special security clearances that they cannot get — also because of the shutdown.
Carr, who runs the Fairfax-based engineering consultancy company Technical Management Resources, has kept the workers on staff for the time being, saying that her business is “like a family.” It’s costing her money to retain the workers, but there’s a practical reason for doing so: She’d have to hire, train, and get clearances for new people, incurring new costs.
“People talk about the 800,000 federal workers who are not getting paid. But for every one of those, you have two and a half contractors behind them,” Carr said. “There are businesses that have overhead expenses: recruiters, contractors, developers that are dependent on those people walking through the federal government’s doors to their job.”
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There are an estimated 4.1 million federal contractors, both companies and individuals, that do a variety of different jobs for the government, from construction projects to staffing cafeterias. It is unclear how many have been affected by the shutdown, given the variety of contracts the government engages in.
A common point made by companies contacted by the Washington Examiner the contracts they bid often require specialized skills, so they try to avoid to laying off the workers who can do those jobs.
People that work for large companies that rely on contracts, like Booz Allen Hamilton, may be OK for the time being, thanks to the size of the contracts their employers get. How long those companies can continue to keep their workers on board, though, is an open question.
“Booz Allen has a small number of employees impacted, as the vast majority of the contracted work we’re doing for the government has already been funded,” said spokesman James Fisher. “We’ve been covering those impacted employees since the shutdown began.”
The company is sending some idled workers to assist with the contracts it has that are currently funded by the government, he said. For the rest, they are being asked to “focus on training, professional development, and other efforts.”
Smaller companies like Tethers Unlimited, a Washington state-based business that provides parts for rockets, don’t have that room to maneuver. “We have not been paid for work we’ve done on contracts for NASA and DARPA [the Defense Advanced Research Projects Agency] because the people responsible for approving and processing the invoices we have submitted have been furloughed, so they’re not at their desks to approve them,” said Robert Hoyt, president of the company.
DARPA itself is still functioning, Hoyt notes, as its workers apparent fall under an exception to furloughs because they are engaged in defense or security-related jobs. Tethers Unlimited, however, was not spared, because the contracts it got were issued through the Interior Department. And that agency is shutdown.
As a consequence, Hoyt has had to lay off 12 engineers, about 20 percent of his workforce, earlier this month. He’s trying to avoid further ones. “We have to take a conservative approach to managing our cash-flow to keep as much of our team together as possible,” he said.
Hoyt did get one invoice recently paid, he adds. “So, apparently, there is still one guy somewhere in the department still doing this,” he said.
With the federal government shutdown now having gone on for more than month, even contractors that do not directly work with the government are feeling the squeeze. Max Avery, president of Arkansas-based Bolding Construction, is finding his business stymied by the fact that his clients cannot get government loans.
“We do some individual home rehab projects. It became a hurdle in the lending process for people trying to get into a first-time home with federal assistance programs for their mortgages,” Avery said. “We had a few on the table that had to be pushed back due to the shutdown.”
Carr says she’s facing another unexpected problem caused by the furlough going on so long. One of her employees, who is a military reservist, has been called back to duty, apparently to provide the government with extra hands to deal with the shutdown.
“So she cannot engage in a contract because I cannot get her cleared, and I am paying her every day, but I cannot charge her to anybody,” Carr said. “And then, because she’s been called up — if nothing changes in the next two weeks — she’s going to work for the military, and I am going to lose her altogether.”
