Tags: Government | shutdown | federal | contractors

Government Shutdown Threatens Federal Contractors

By    |   Thursday, 03 October 2013 08:02 AM

Federal contractors are starting to feel the pinch of the government shutdown, and if it isn't wrapped up quickly, the pain in the private sector is likely to intensify, industry leaders warn.

In a survey by the National Association of Government Contractors, 29 percent of the 925 contractors polled said a shutdown would delay planned hiring, and 58 percent said it would have a negative impact on their business, USA Today reported.

Contractors often have federal workers as supervisors and the contractors rely on government officials to make essential decisions that guide the course a project. If the government workers are not on the job, the contractors say it threatens progress and the stability of private labor.

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Daniel Stohr, spokesman for the Aerospace Industries Association, told USA Today that meetings between contractors and Defense Department officials are already being canceled, which threatens to delay projects and could result in aerospace contractors temporarily laying off employees while the government's decision makers are furloughed.

Brian Turmail, spokesman for the trade group Associated General Contractors, warned of similar problems in the construction industry.

Many of the nation's construction workers are building and renovating federal structures. Without government supervisors to answer critical questions or approve changes, projects could be delayed and thousands of workers could get laid off if this shutdown lasts a week, Turmail said.

One Federal Solution provides information technology, health care and training services to government agencies. The company has moved past citing potential effects, reporting that 107 members of its 115 person staff were considered non-essential and have already been furloughed.

"We're concerned about employees losing faith" in the company "even though we have no control over it," CEO Abdul Baytops told USA Today.

Cummings Aerospace aims to maintain its credibility with employees. CEO Sheila Cummings, told AL.com she's expecting slow contract payments, but her company is assessing how to manage cash flow to minimize the effect on employees.

"We'll continue to honor our commitment to our employees, even if that puts us in a position where we have to increase our line of credit at the bank or if it costs us more money from an interest-rate perspective," Cummings noted.

"If the shutdown is prolonged for weeks, we will have to evaluate how we can cut our costs to address the reduction in revenue. That might cause us to reexamine furloughs or going to a four-day workweek," she added.

Jennifer Allen, director of media relations for Lockheed Martin, told AL.com at this point, the company intends to stay open and continue paying employees, but Lockheed officials are "disappointed" and "hopeful for a quick resolution" to the shutdown.

Otherwise, the effects will extend beyond furloughed federal workers, cautioned Fernando Galaviz, chairman of the National Federal Contractors Association.

"A week would be like a bad headache," and could affect 250,000 to 300,000 contract workers in some way, he told USA Today.

"If it's more than two weeks, they can expect a lot of negative impact," Galaviz said.

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Federal contractors are starting to feel the pinch of the government shutdown, and if it isn't wrapped up quickly, the pain in the private sector is likely to intensify, industry leaders warn.
Government,shutdown,federal,contractors
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2013-02-03
Thursday, 03 October 2013 08:02 AM
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