Contractor Groups Warn of Government Shutdown Risks

With the federal government heading toward another shutdown next week, a leading contractor group highlights the disruption that a shutdown would cause for its members. Meanwhile, a recent report on the impacts of political uncertainty in government funding underlines these points—and then some.

Congress’ latest flirtation with a federal government shutdown is not getting a warm reaction from federal contractors.

This week, contractors met in Tysons Corner, Virginia, at an event sponsored by the Professional Services Council (PSC), to discuss the issues that contractors might face if Congress fails to pass a continuing budget resolution before the September 30 deadline. Some House Republicans are threatening to allow the government to close down rather than pass a resolution that includes funding for Planned Parenthood.

A government shutdown next week would be the second in two years. PSC says another shutdown so soon after the last one in October 2013 could have a dire consequences for the industry.

“There is a lot of concern because it’s completely out of their control,” PSC Executive Vice President and Counsel Alan Chvotkin said, according to The Washington Post.

Thinking Beyond the Politics

While it may be tough to for organizations whose members depend on government contracts to wade through the political tide, one thing that could help is to make a case on the financial impacts of shutdowns.

A recent report on the issue of government dysfunction by the Partnership for Public Service does just that. “Government Disservice: Overcoming Washington Dysfunction to Improve Congressional Stewardship of the Executive Branch” highlights the effect that constant funding uncertainty has on both the government and the private sector.

Sean O’Keefe, a former NASA administrator and the immediate past chairman of the National Defense Industrial Association, pointed out that many contractors that supply goods and services to the federal government left the space after the 2013 shutdown.

“It was too disruptive, uncertain, and time-consuming. They chose not to wait around to find out if or when the government would have the authority to buy something,” O’Keefe said in the report [PDF].

And less competition, he said, had ripple effects that actually raised costs for both contractors and the government.

“Now you have fewer suppliers,” O’Keefe added. “With fewer suppliers, costs go up, competition goes down, and quality takes a dive. This was evident across the industry providing products and services to the government. For the prime contractors looking for cost-effective suppliers, that’s a profoundly serious challenge.”

Silver Lining

One thing that might help contractors this time around is experience. Before the 2013 shutdown, it had been nearly two decades since a federal spending debate forced a hold on most government outlays.

“That was the first time many of us had been through it,” RGS Executive Vice President Dyson Richards said at the PSC event earlier this week, according to the Post. “Having the 2013 experience helped us, so we’re a little more prepared this time.”


Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

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