Stop-Work Orders Beginning to Go Out to Contractors
Companies wrestle with "highly fluid" shutdown situation.
The Federal Communications Commission on Dec. 22Β put out a message to staff saying it had sufficient funding to stay open during the partial government shutdown until the close of business, Jan. 2.
But on Dec. 31βwith the prospects of a deal between the White House and Congress remaining weakβa new message announced that the regulatory agencyΒ βwill suspend most operations in the middle of the day on Thursday, Jan. 3.βΒ (Still working will be employees involved in βprotection of life and property,β spectrum auctions and the Office of the Inspector General.)
Contractors working to support the FCC were among those who haveΒ shared concerns with the Professional Services Council, according to Alan Chvotkin, the groupβs executive vice president and counsel. βA number of member companies have received stop-work orders from agencies,β he toldΒ Government ExecutiveΒ on Wednesday. Others have βreceived communication from agencies saying they are fully funded and should continue working unless informed otherwise. Itβs a highly fluid set of circumstances,β he said, referring to the unprecedented situation of a third shutdown in a single year that has spilled over into 2019.
The council, whose members have contracts with the shutdown-affected State and Justice departments, the U.S. Agency for International Development and the Homeland Security Department, recently posted on its website for members an updatedΒ Congressional Research Service reportΒ on the history of shutdowns, their costs and changes in agency guidance.
βAs recently as Monday,β Chvotkin said, βweβve encouraged members to continue to reach out to agencies for as much information as they can glean, and to continue to communicate regularly with their own workforce.β Most importantly, he added, contractors are urged to βdocument any government actionβs impact so that when when funds do become available, if there is any basis for seeking a recovery, they would have contemporaneous records.β
Another contractors group, the National Defense Industrial Association, on Dec. 17 posted its ownΒ guidanceΒ for handling a shutdown.
The Aerospace Industries Association as of Wednesday was sticking with its statement put out on Dec. 22 before the holidays.Β βWe strongly urge Congress and the president to reach an agreement and reopen the closed agencies as quickly as possible,β AIA President and CEO Eric Fanning said. βEssential science, space explorationΒ and air traffic control modernization work is being delayed, decreasing industryβs ability to invest in our nationβs future. This is no way to run a business β or a government.β
Anecdotally, βthereβs still a lot of confusion, as many agencies are still trying to figure out whether they put out stop-work ordersβ and precisely what has been funded, Kraig Conrad, CEO of the National Contract Management Association, toldΒ Government ExecutiveΒ on Wednesday. βMany on the contractor side may have clarity, but they have a concern because they have subcontractors,β he added. βif youβre a small contractor, this could be a big deal because you may not have the resources and working capital to survive. So thereβs even less clarity.β
Conrad had heard from contractor employees who are stationed inside federal agencies who showed up for work last month, only to be denied access to the building.
βThis difficult situation is devastating to most small business federal contractors,β echoed Richard Bodson, president and CEO of SysNet Technologies, a cybersecurity services small business contractor. βOne company of about 75 employees that makes over $12 million per year in revenue is therefore suffering a loss of $1 million per month amplified by the double-hit of a cost of almost $600,000 per month,β he toldΒ Government Executive in an email.
βSysNet has been fortunate through the annual government shutdowns and continuing resolution events in that the services we provide and the federal systems we support are all considered 'essential,'Β β he added. βThe oddity for federal workers who are shut down is that they are in essence getting free vacation time. Admittedly the situation is tough on their cash flow, but ultimately they get paid for this shutdown time off, whereas the majority of federal contractors are not considered essential and they do not get compensated for the down time.β
To ease the situation, Bodson opined, βit would be appropriate for the legislators and president to experience the same burdens that these situations impose on federal employees and contractor employees and businesses. That may inspire compromise among the debaters, regardless of their political affiliation.β
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