United States: Which sectors impacted by partial federal shutdown?

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The economic impact of the partial government shutdown is hitting very hard an unknown series of workers for federal contractors, such as Transylvania Vocational Services in Brevard, where around 160 workers there were still filling orders in the court this week. But the company has been running on reserves, and the jobs were at risk. However, the biggest customer, the federal government, has stopped paying the bills. TVS is a federal contractor that supplies dry milk and baking products to food banks across the country.

The partial federal government shutdown, which has entered its fourth week, led to miss paycheck for more than 800,000 federal workers in the US, but it also threatens private companies that run their business with affected agencies.

TVS CEO Jamie Brandenburg, who met with his employees, said, “Most of what’s getting a lot of attention from the public is the federal employees,” adding, “and I’m very sympathetic. But when the government opens back up, they get back pay. The contractors are getting overlooked.”

According to an analysis of government contractor data by The Washington Post, TVS considered as one of the 10,000 companies that hold contracts with the government agencies which are affected by the government shutdown.

The data, still incomplete and ceased due to shutdown, shows a series of risk to contractors, communities and their employees. For now the overall average value of their work estimated to around $200 million a week.

At R3 Government Solutions, an Arlington, Va.-based company that helps government agencies with workforce planning and managing information technology resources, few contract workers helping FEMA have been left unsaid, said chairman and chief operating officer, Glenn Hartung.

Hartung said, “The people that are being furloughed are without pay and the people that we’re saying we’re not sure how long we can continue to do that.” He said, “It’s basically kind of a turmoil.”

Agency contractors include several large corporations that are not been threatened.

General Dynamics, where subsidiaries used to work with an affected agency like Environmental Protection Agency, Transportation Security Administration, and National Oceanic and Atmospheric Administration.

The vice president at General Dynamics Jeff Davis said: “We are watching the situation carefully, but the impact thus far on our operations has been negligible.”

However, the shutdown might be creating tensions at smaller companies too, where federal contract work plays a huge role.

According to estimated contracting data, about two-thirds of contract with shutdown-affected agencies worth less than $10,000 a week.

At New Editions Consulting, a Falls Church, Va., company that use to help federal agencies website to be more accessible to people, around 8 of 60 workers has been told to halt their work over a federal contract but were then put on other work.  As the work could not be billed to the US government, the reassignments have affected the overhead and profit margins of the company.

The company’s president Shelia Newman said, “These people have families; they have kids; they have mortgages,” adding, “So I’m going to keep them on as long as I can.”

Also, other such companies have scheduled their necessary training for their workers affected by the partial shutdown or suggested to take vacations. Contract workers, unlike government workers impacted by the shutdown, have not received any payment for their work during the shutdown.

Even those federal contract that isn’t officially ceased, can get mired in shutdown-related complications. Government background checks are not available. Notices may not get published in the federal register. There may be no federal workers to approve the completed contracted work or make payments, approve new contract workers or issue an export license. Contract workers who worked with government workers cannot do work even if they want to do so if the company’s building is shuttered.

In many cases, the impact over contract workers will never be disclosed or known as the government has recorded on them, and sometimes companies are often reluctant to discuss publicly their contract work.

A contractor official, who was not authorized to speak publicly, said, “There’s a lot of understandable concern than you don’t want to ever offend one of your customers.”

What contract employees do –

Contracting companies and its workers almost do everything for federal agencies. Contracting companies are the source for the federal government to buy food, furniture, vehicles, books and almost all of the other goods. However, the purchase of the products accounts for one-fifth of contracts funding with agencies which are affected by the shutdown. The other four-fifths is for services.

Contracting companies’ services can offer supporting government offices and their programs, from a clerical to budget analysis and specialized studies. Executive vice president of the Professional Services Council, Alan Chvotkin said, “The feds are the decision makers.” He said, “But it may be a contractor who is compiling all the data in a form for the decision maker to use.”

Chvotkin said the agencies use contracting companies as a supplemental workforce as they can readily do anything to meet the varying services demands. And hence it provides access to agencies to specialized services and highly skilled employees.

Chvotkin said: “Much of the products and many of the services that the federal government uses in their own performance, as well as in providing services to citizens, are done by federal employees and contractors working together.”

Growth in federal workforce comes from contracting

According to Paul Light, a professor of public service at New York University, the growth in the government contracting is also fueled by several political considerations as well as limiting the size of the federal workforce and also minimizing competition of government with business.

Light has estimated the overall federal contractor workforce at about 4 million, doubled federal civilian employment. He said, “It’s a small economy in its own right.”

The districts like Maryland and Virginia may have suffered high risk in the fallout due to shut down because they only acquire 37 cents of each $1 of services or products supplied to shuttered agencies under contracts.

At the NASA Goddard Space Flight Center in the Maryland suburbs, the researchers said that the shutdown was interfering with their important scientific work.

Meredith Elrod, a planetary scientist working on NASA’s Maven project, an ongoing mission to study the atmosphere of Mar, as a contractor, said the scientific conferences have been canceled as federal scientist were not available to fund their travel expenses due to unpaid living, and granted that payment of some researchers’ salaries have been delayed.

Elrod’s project only has suffered few weeks of non-funding. Elrod said, “It’s all kind of vague as to whether we have the money or not,” further adding, “We get different answers about whether or not we can work, and we have no guarantee that we’re ever going to get back pay.”

How shutdown impacted US political relations – 

Due to the government shutdown, the US President Donald Trump has threatened the country with a national emergency, but however, did not impose it.  Trump has also canceled trips of government legitimate leaders due to no funding.

Here is what a congressional research service report state: “With regard to the President’s pay, Article II, Section 1 of the Constitution forbids the salary of the President to be reduced while he or she is in office, thus effectively guaranteeing the President of compensation regardless of any shutdown action.”

Regarding ministers of Congress, the report said: “Due to their constitutional responsibilities and a permanent appropriation for congressional pay, Members of Congress are not subject to furlough. Additionally, Article I, Section 6, of the Constitution states that Members of Congress ‘shall receive a Compensation for their Services, to be ascertained by Law, and paid out of the Treasury of the United States,’ and the 27th Amendment states, ‘No law, varying the compensation for the services of the Senators and Representatives, shall take effect, until an election of Representatives shall have intervened.'”

As for congressional staffers, it says, “Any decision regarding requirements that a congressional employee continue to work during a government shutdown would appear to fall to his or her employing authority”- that is, the member of Congress for those working in personal offices, or the legislative agency for those working for one of them. The House Administration Committee, which oversees operations in that chamber, on Friday issued guidance saying that offices should keep on the job “only those employees whose primary job responsibilities are directly related to constitutional responsibilities, the protection of human life, or the protection of property. All other House personnel shall be placed in a furlough status by the appropriate employing authority until further appropriations are made.”

Guidance from the Office of Personnel Management says the large majority of political appointees “are not subject to furloughs because they are considered to be entitled to the pay of their offices solely by virtue of their status as an officer, rather than by virtue of the hours they work. In other words, their compensation is attached to their office, and, by necessary implication of the President’s authority to appoint such employees, their service under such an appointment creates budgetary obligations without the need for additional statutory authorization.”


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