Shutdown Hits Usually Stable Business: Government Contractors

About half a million federal workers remain furloughed because of the congressional budget impasse that's keeping the government partially shut down. The closure has entered its tenth day. Contractors that feed off government spending are also feeling the pinch.

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More than 400,000 federal workers remain on furlough. That's the situation even after many Defense Department workers were called back to the office. And then there are federal contractors. These are private, American business owners and workers who've taken over more and more government functions in recent years, and who are now feeling the pain of a shutdown.

NPR's Yuki Noguchi reports.

YUKI NOGUCHI, BYLINE: It appears to be just another day at the warehouse at ServiceSource, an Alexandria, Va., federal contractor that employs over 900 disabled or blind workers. Here, some workers are dismantling old computers or refurbishing them, or sorting through goods for a thrift store.

But many of the company's workers normally work in food service for the FBI, or in administrative jobs at NASA, or at Veterans Affairs hospitals. And right now, 15 percent of them are cooling their heels at home because the offices where they work are closed.

BRUCE PATTERSON: Thirteen programs that are closed currently, four that are at reduced operations, and 31 that are at normal operations.

NOGUCHI: Bruce Patterson is chief operating officer of ServiceSource. He says in the past few years, fiscal uncertainty has caused several disruptions to an otherwise historically stable business.

PATTERSON: We've made the decision that we'll pay folks for the first four days of closure. After that, we'll allow people to utilize their accrued leave - which they do accrue on these federal government contracts. But beyond that, if the closure continues, they'll be subject to leave without pay.

NOGUCHI: One of the people at risk of that is a man who's worked for 35 years sorting and distributing mail at the Environmental Protection Agency.

FREDERICK LEANDER PICKETT JR.: My name is Fredrick Leander Pickett Jr.

NOGUCHI: Pickett, who has a disability, is tall, 56, and flashes a smile even as he talks about being out of work. He says he misses his colleagues and the people along his mail route.

PICKETT: In fact, pretty soon - on Oct. 23rd - I'm getting a special award, a service excellence award that's voted by my peers, you know, my co-workers. And I'm really proud of that.

NOGUCHI: Pickett's paycheck enables him to live at a subsidized community home, and live independently.

PICKETT: It's kind of stressful because, you know, I like to work. And I've been using my annual leave, and when that runs out, then it will come out of my paycheck - which, you know, I'm on, you know, a fixed income.

NOGUCHI: With a big chunk of government operations on furlough, the ripple effects are far-reaching, most notably among defense contractors. Some, including United Technologies, canceled furloughs after the Pentagon recalled most of its civilian workers. But Lockheed Martin said this week, 2,400 of its workers remain out of work. A company called Restaurant Associates provides food to many Smithsonian museums, and to the House and Senate. It says it's trying to redeploy affected worker. But where that's not possible, its employees, too, will go on furlough.

It's too early to assess the overall economic impact of the shutdown. But there are early signs businesses are losing faith. The National Federation of Independent Business yesterday reported its members are increasingly pessimistic about the business outlook.

MARK MICHAEL: Yeah, chaos is never good for our business.

NOGUCHI: Mark Michael is CEO of Occasions Catering, a Washington, D.C., company. It is not a federal contractor but caters weddings and corporate events at places like the National Archives, the Smithsonian Air and Space Museum, and the Library of Congress - all of which are closed. Now, Michael says, the company is scrambling to find other venues.

MICHAEL: Without an end in sight, we're sort of still looking two weeks out, but not really three weeks out. You know, we're sort of taking it day by day and working with our customers, who are nervous.

NOGUCHI: The real problem, he says, is that no one feels like planning a party amid a shutdown.

Yuki Noguchi, NPR News, Washington.

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