The U.S. government shutdown may hurt contractors long after Congress and President Barack Obama find a way to open federal offices and resolve the debt ceiling dispute.
Federal agencies award more than $500 billion a year, or a rough average of $1.4 billion a day, to tens of thousands of contractors. With each day of the partial shutdown, the pipeline gets more clogged by late payments, halted work and canceled solicitations for new contracts. That bottleneck may affect contractors’ fourth-quarter results.
“Even if the government suddenly opens for business, we can’t expect everything to get back to normal right away,” said Larry Allen, president of Allen Federal Business Partners, a McLean, Virginia-based consulting company. “This is going to be a wave that makes its way through the government’s operational infrastructure probably at least until the end of the calendar year.”
If the shutdown continues through the end of the week, it will be difficult for big contractors to make up for lost revenue before the end of the year, said Michael Lewis, managing director at McLean, Virginia-based Silverline Group LLC, a strategic consulting firm for aerospace and defense.
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