For D.C.-area companies that get their revenue from government contracts, it’s shaping up to be a stressful holiday break.
Sen. Mitch McConnell (R-Ky.) said Saturday that the Senate has adjourned until Thursday after President Trump threatened to veto any spending bill that didn’t include $5 billion for his proposed border wall, meaning many federal agencies are shut down indefinitely. Trump warned Friday that the shutdown would last “a very long time” if Democrats did not support funding for the border wall.
In the meantime, those working for government contractors say they are heading home for the holidays with little guidance about what happens next.
The government is offering guidance to contractors on an agency-by-agency basis, and contractors usually receive “stop work order” notices when their respective agencies are out of funds for the year. Companies that serve the Defense Department and intelligence agencies are largely unaffected. But those serving the Department of Homeland Security, Interior Department and certain law enforcement agencies, among others, saw their funding expire at midnight.
Representatives from the Professional Services Council, a trade group representing government contractors, said Saturday that their members have not reported receiving stop work orders. And with agencies slipping into holiday mode, contractors are doubtful that they will see any guidance until Wednesday.
“I’m not sure who is going to be in on Monday or Tuesday to issue those stop work orders anyway,” said Professional Services Council general counsel Alan Chvotkin. “I think we’re going to see a slight delay before we understand the implications of this shutdown.”
Dave Cerne, chief executive of a Reston-based government contractor called Acclaim Technical Services, said he left the office Friday without knowing how exactly his employees would be affected. Because Monday is a federal holiday and Tuesday is Christmas, many employees of government contractors will spend the break wondering when, or whether, they should return to work.
“We’re getting emails all day long saying, ‘What do we do? Do we come to work on Wednesday?’ ” Cerne said. “There shouldn’t be so much uncertainty around [the government shutdown] because it happens almost on an annual basis, sometimes multiple times a year.”
Barbara Kinosky, a lawyer with the government contracting consulting firm Centre Law & Consulting, said contractors with on-site employees at civilian agencies such as the Department of Homeland Security are already having trouble. She said she has heard from companies that are considering laying off some employees rather than keeping them on the payroll for work the company isn’t being paid for. She declined to name them.
“The government employees will most likely get back pay,” Kinosky said. “The on-site contractors who make the government work will receive nothing. No company can afford to keep employees on the payroll they cannot earn revenue on.”
Franklin Turner, a government contracting attorney with the law firm McCarter & English, said the partial government shutdown could cause important procurements to “grind to a halt” as contractors are unsure whether to continue work.
“Right over the holidays, government contractors will have to make some really tough decisions about people’s employment,” Turner said.
Professional Services Council chief executive David Berteau said he remembers the last time the government shut down over the holidays. It was 1995, and he was working at the government services contractor Science Applications International Corporation.
“It’s the worst time of the year to have a shutdown,” Berteau said. “First of all, you have no idea when it’s going to end. But also, there’s nobody around to answer your questions or do any planning.”
Clarification: An earlier version of this story stated that Sen. Charles E. Schumer said the Senate would adjourn until Thursday. Sen. Mitch McConnell announced the news.