U.S. Government Shutdown Costing Private-Sector Contractors $245 Million Every Day
As it rounds up its third week, the partial government shutdown isn’t only affecting hundreds of thousands of federal employees. Contractors are potentially losing out on $245 million each day the shutdown continues, Bloomberg estimates.
Private-sector organizations that serve federal agencies including the Department of Homeland Security, the United States Agency for International Development and the Environmental Protection Agency have been told to stop work on certain contracts, with little indication as to what happens next, the Washington Post reports.
Homeland Security’s Federal Emergency Management Agency (FEMA) last week posted a “blanket” stop work order affecting scores of open contracts, the Post reports. “Any work done after receipt of this notice is at your own risk and will not be reimbursed,” Bobby McCane, FEMA’s head of contracting activity, wrote to federal contractors. “I thank you for your assistance during this funding lapse.”
In the fiscal year that ended Oct. 1, 13 agencies affected by the shutdown counted $89.3 billion in obligations to contractors, an average of $245 million per day, Bloomberg calculates. The Department of Homeland Security, NASA and the State Department accounted for more than half of that.
The Department of Defense remains fully funded and operational. Fortune has reached out to major defense contractors including Lockheed Martin, Boeing, General Dynamics, Raytheon and Northrop Grumman and will update this story as they reply.
If the standoff continues, on Wednesday it will become the second-longest government shutdown in U.S. history. Federal courts will run out of money Friday. Of the 800,000 federal employees affected by the shutdown, 380,000 are furloughed without pay, and the rest are working without pay, the Washington Post reports.
The partial government shutdown started on Dec. 22 after President Donald Trump declined to sign spending legislation without $5 billion for the border wall.