As the partial government shutdown moves into its third week, some American defense firms are starting to get multi-million-dollar IOUs instead of payments.
Even though Pentagon projects are unaffected — the Defense Department is already funded for fiscal 2019 — the shutdown is squeezing contractors who do work for NASA, the Department of Homeland Security, Federal Aviation Administration, and other federal agencies. Many companies aren’t getting paid, even as they continue to pay the salaries of employees shut out of closed government offices.
Take SAIC and Engility, two of the government’s largest service contractors. Executives for the soon-to-merge companies say the payroll for workers idled by the shutdown comes to $10 million every week. And just three weeks into the freeze, they say, the government is some $40 million to $50 million behind in payments.
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