By Ann Sullivan, WIPP Chief Advocate
If you keep a close eye on Washington from year to year, you’ll notice some traditions that always take place. The annual White House Easter Egg Roll in the spring, when children gather to race eggs with wooden spoons down the South Lawn. The Congressional baseball game in the summer, when House Republicans face off against House Democrats at the Nationals park to raise money for charity.
And, of course, the talk of a looming government shutdown any time the previous funding mechanism is about to run out—a tradition that affects so much more than the District of Columbia.
We’ve heard it before and we’ll hear it again—If Congress doesn’t find a way to fund the government, it will shut down. In true fashion, with the deadline to pass a bill set for last Friday, April 28, Congress gave itself a little more time by passing a week long Continuing Resolution—until May 5, without altering the terms or conditions that apply to funding.
And then—a welcome break in tradition. Congressional negotiators in a bipartisan fashion, finalized a $1.1 trillion spending bill, keeping the government funded through September.
While a government shutdown rarely actually happens—when it does—it is not good for women business owners. In fact, it isn’t good for anyone. When federal contractors can’t get paid, they can’t pay the people who work for them. When they can’t pay the people who work for them, they can’t produce any work. The contractor suffers, the jobs she’s created suffer, and the economy suffers.
However, some contractors don’t have the option of laying off their employees during a shutdown. WIPP Board Chair Lisa Firestone struggled with this firsthand. In 2013, Lisa testified before Congress about the negative impact that year’s shutdown had on her business, as well as other women federal contractors. Because her company provides “essential” services, her employees continued to work and get paid during the duration of the government shutdown that year. Despite knowing she eventually would get paid from the government, there was no way to know when. She’s not the only one.
Many small business owners face this same problem and face the stress of preparing to maximize available cash in advance of a potential shut down. Between the options of a shutdown and a Continuing Resolution, a Continuing Resolution is the lesser of two evils. But, it may not be so great for women contractors either.
Continuing resolutions curb new government spending and, thus, new government projects. We know firsthand from our members that operating under a Continuing Resolution results in project delays as well. Since many agencies can’t open expired contracts for new bids, they often turn to uncompetitive bridge contracts with existing vendors to keep services moving. The problem is, according to the Department of Commerce, women-owned firms are 21% less likely than their male-owned counterparts to win government contracts. Given this significant barrier to entry, access to contracts is further exacerbated by this method of procuring goods and services.
The impact of a shutdown is harsh on contractors. If the government is your customer, the consequences are immediate. The Department of Homeland Security in the 2013 shutdown issued a warning to its contractors: “…as a consequence of the lapse, certain planned procurements may be canceled and certain existing contracts may be stopped, reduced in scope, terminated or partially terminated.” Not to mention, the chaos created with respect to lending. Since lenders rely on the IRS to verify income, lending was stopped dead in its tracks.
Let’s get rid of this tradition. Successful businesses plan ahead and so should Congress. The wide-reaching consequences spurred by Congressional inaction of a timely budget are significant. Contracts that aren’t funded by prior appropriations and aren’t essential probably will be put on hold during a shutdown – while contractors that are essential will have to continue to work, but while having to bear the cost of their employees’ salaries. The business community should be spending all of its capital expanding, not saving up for a possible government shutdown. Despite the good news for the remainder of Fiscal Year 2017, the fight has just begun for Fiscal Year 2018. It’s time for Congress to put together a plan to fund the government without worry of a shutdown or relying on Continuing Resolutions again and again so entrepreneurs can worry about what matters – running their business.