Sure, the government shutdown is bad for big federal contractors, the Lockheed Martins and Booz Allen Hamiltons of the world. But it's potentially even worse for small contractors, which don't have the same kind of cash reserves to keep people around indefinitely. Stacy Robison runs CommunicateHealth, a Northampton, Mass.-based Web design firm that helps people understand health-care programs, often for federal clients like the Centers for Disease Control and the department of Health and Human Services. The shutdown is bad news.
Lydia DePillis: So how is this situation affecting you?
Stacy Robison: Sixty or 70 percent of our work comes from federal contracts. As far as I can tell, most of that is gonna stop. So it is a big deal for us, and it follows on a really hard deal, with sequestration. It's just a really uncertain budget environment. As a small business, it makes it really hard to hire. We want to be hiring, and it's what the economy needs right now. But with sequestration and the shutdown, we're just buckling down, and sitting tight. For us, the money may not be there.
LD: And what did the sequester look like exactly?
SR: There's still work, it's just there was a lot less work. They put out money in the summer for the next fiscal year, and we look for all the new contracts to be posted that we compete for. There are fewer of those, and the ongoing ones were smaller, and the government's trying to do a lot more in-house. For a business trying to hire and staff up, it makes it nearly impossible. Normally we would staff up, bank on winning a chunk of it, and we'd be good to go.
LD: Can't you just get private sector clients to replace the government work?
SR: For us, yes, because we do have those relationships in the private sector. It doesn't happen overnight. With a small business, you build a business around being a federal contractor, because the process is so complicated. To get on the GSA list for the government to purchase your services is a year-long process. Most contractors build their business around the government, because it's so different from the rest of the world. It's almost like an invisible economy of federal contractors out there. The government does spend a lot of money on contractors, and they have to. These are people's real jobs and businesses.
LD: So what are you doing now?
SR: We're going to have people sit tight through the rest of the week. We're going to just carry them. On Friday we'll let people know, but potentially we'll have to furlough half our staff, which is just a really hard process. It's not that the money will disappear, but if our clients aren't working, we can't communicate with them. We're basically supporting the government employees in doing their jobs. So if they're not working, for the most part we can't work. We work on some federal Web sites, where the server is housed in a federal building that we need escorted access to. If that building is shut, then we can't get the server to make an update to a federal Web site. Other times it's more just without that constant communication and direction, we can't be doing our projects.
The fact that the whole thing is happening over Obamacare is absurd. I don't know any small businesses who are upset about Obamacare, but I know a lot who are upset about the shutdown. It really feels like as a small business, that people aren't talking about this angle right now. You can't just yank billions of dollars out of the economy, and think that there aren't going to be impacts. I see no way that the Republicans after this will be able to say that they stand for small business. It's a joke.