The guidance says employees may be “excepted from furlough to make timely payments” to companies from funds previously obligated. Having unpaid workers return to work to pay contractors is, the guidance added, “akin to the well-established practice of excepting personnel who are needed to make benefits payments … such as social security benefits.”
This reverses a policy implemented almost exactly one year ago. In a memo then to agencies, OMB Director Mick Mulvaney said the need to make payments “on a timely basis does not, by itself, qualify as one of the limited circumstances for which obligations can be incurred.”
“There may be circumstances in which making a payment, during the funding lapse, is necessary,” the 2018 memo added. But paying contractors simply because the money is available is not one of those reasons. In fact, it is illegal, according to an OMB lawyer with the Obama administration.
“This new guidance is directing government officials to break the law,” said Sam Berger, who was among the senior officials providing government-wide guidance during the 2013 shutdown. “Payments can only go out the door during a shutdown in the rarest of circumstances: when they’re necessary to protect life or property, to preserve the president’s constitutional functions, or because not doing so immediately would significantly damage a funded program. Otherwise, payments have to wait until the shutdown ends and agencies have the authority and funding to pay the federal workers they’re asking to do the job.”
My colleagues Damian Paletta and Juliet Eilperin mentioned the new guidance in a report about OMB asking agencies about potential problems if the shutdown goes into March and April.
Far from considering the new policy illegal, David J. Berteau, president and chief executive of the Professional Services Council, which represents government contractors, said OMB should make it clear that “the predisposition of the government is to call back the workers necessary to pay those invoices” approved by agencies for the companies. “It’s only fair. . . . They’ve done the work. In most cases they paid their employees.” The new policy does that, he added, but it’s “a little too discretionary, and it should be less discretionary. It should be more mandatory.”
Berteau spoke during a conference call with Neil Bradley, U.S. Chamber of Commerce executive vice president and chief policy officer. Because of the shutdown, now 35 days old, more than $2.3 billion in small-business contracts are “at risk,” affecting more than 41,000 small firms, according to data from the Chamber and Bloomberg Government.
Ironically, officials in the Republican Trump administration now justify reversing its stance from last year, by citing policies from 1995 issued by the Democratic Clinton administration.
“President Trump has directed all impacted agencies to make the partial lapse in appropriations as painless as possible for the American people, consistent with law,” said OMB spokesman Brad Bishop, who also took a partisan dig at Democrats. “The administration is applying a meticulous and thoughtful process — on a case-by-case basis — when interpreting this guidance to make legal determinations that help preserve government programs until congressional Democrats send the president an acceptable bill that both reopens the government and provides proper border security for the American people.”
Rep. Gerald E. Connolly (D), chairman of the House Oversight and Reform subcommittee on government operations, represents a Northern Virginia district that is heavy with federal employees and contractors. He wants both to be paid, but he does not approve of making federal staffers work without pay so contractors can get theirs.
“I do not believe it's proper or appropriate,” he said, “to call back furloughed workers and ask them to do their jobs without proper compensation.”
Richard Loeb, a lawyer with the American Federation of Government Employees, which represents some federal procurement staffers, called the new OMB policy “a major concession to contractors, and an insult to agency acquisition staff."
It’s an insult that could have broader implications for the unity among federal employees and contractors that the shutdown has fostered.
“I believe the shutdown has actually built a sense of solidarity within the multi-sector workforce during the shutdown based on a shared commitment to public service,” said Paul C. Light, a professor of public service at New York University. He is the author of several books related to the federal workforce, including “The Government-Industrial Complex."
“This will create needless conflict between federal employees and contractors who often sit side by side in federal offices, work side by side in pursuing public impact,” Light added. “My sense is that feds and contractors have been standing together on getting back to work to date. This sends the wrong signal to the workforce as a whole and doubles down on the sense that the shutdown is at least in part about punishing feds.”