Federal contractors are wringing their hands over the next budgetary deadline, as a string of four continuing resolutions and a three-day partial government shutdown has already upended their plans for fiscal 2018.
The current continuing resolution is due to expire Feb. 8.
“There’s going to be a fifth,” House Minority Whip Steny Hoyer (D-Md.) said Thursday afternoon at a small discussion with federal contractors and small business leaders on the Maryland Space Business Roundtable and the Goddard Contractors Association in Lanham, Maryland. “No doubt about it, there’s going to be a fifth.”
Hoyer said he spoke with House Majority Leader Kevin McCarthy (R-Calif.) about bringing the fifth continuing resolution to the floor next Tuesday, adding that he would surprised and disappointed if the government shut down a second time this year.
But Hoyer’s confidence in a fifth continuing resolution isn’t necessarily welcome news to the federal contracting community, which said the four CRs and partial government shutdown have already cost them time, money and talent.
“There’s an illusion that [the continuing resolution] just holds [funding] flat,” said Ann Darin, engineering manager at the Johns Hopkins University Applied Physics Lab. “That’s not how the world works. We can actually save money by having the right plans, by having the right staff in place [and] by having the new starts that take advantage of the new technologies or opportunities.”
Jonathan Kelly, president of the Goddard Contractors Association, said his company spent $125,000 on planning for the past four CRs. The three-day partial government shutdown cost another $125,000.
“In all, we lost enough productive time that we could have hired roughly five or six more people if we had the money,” Kelly said.
“That’s the hard cost,” he added. “There’s also the soft side, the anxiety of employees, the morale, especially the younger ones who have come out and never had to do this before. They suffer more. … It will affect recruitment and stuff like that into the future, when you have so many of these things happening in one budget year.”
Members of the Maryland Space Business Roundtable (MSBR) and Goddard Contractors Association said they were particularly concerned about the impact the shutdown and CRs had on their younger employees, many of whom are still new to their organizations and haven’t earned or set aside enough time to take leave with pay.
Contractors can’t begin new work under a continuing resolution. That’s worried Mina Samii, CEO of ERT, a woman-owned small business that has contracts with NASA, the National Oceanic and Atmospheric Administration and other agencies.
“It’s just keeping things stagnant without having any of the new starts, any of the exciting things happening as part of the government contractors,” she said. “It’s hard to motivate the soft things. It’s hard to motivate individuals to come work on federally-funded contracts. Overall, you lose your edge in terms of starting new and exciting work.”
The three-day shutdown impacted small and large contractors in different ways.
Large companies on phased contracts could, up to a certain point, continue some work during a government shutdown.
“While a big company like a Northrop Grumman can absorb this better than a small company can, unfortunately when the government shuts down it furloughs their inspectors and their audit people,” said Marty Frederick, MSBR president and corporate director of civil space programs at Northrop Grumman. “We can only work up to the point where hit a point in the process where we need an approval to move ahead. If there’s no inspector or auditor in place to do that, we have to stop work. When we stop work, those people are at risk of being redeployed to other things or worse, being furloughed like the government employees.”
For Hoyer, who has many federal employees and contractors in his district, 2018 is beginning to enter new territory.
“We haven’t sent a single appropriations bill to the Congress to fund any part of government,” he said. “I don’t know that in the 37 years I’ve been in Congress I’ve ever seen that before.”