As shutdown continues, government contractors feeling the pinch
Catholic Charities helps dozens of federal prisoners return to society through programs the organization runs in Waterbury and Hartford that provide counseling and behavioral health care to former inmates and their families.
But, because of the federal government shutdown, the organization is no longer getting paid for its services.
Catholic Charities in Hartford is one of scores of Connecticut companies, non-profits and local governments that have contracts with one of the nine federal agencies whose doors were shuttered on Dec. 22.
The partial shutdown, now in its 20th day, is the result of a political standoff between congressional Democrats and President Donald Trump over the president’s demand for money to build a wall along the border with Mexico.
Unlike federal employees who won’t get paid during the shutdown, many who work under contract with the federal government have no chance of ever getting back pay. Some companies have been lucky, having received payment for their goods and/or services before the shutdown. Others are not as fortunate and, like Catholic Charities, have had their funding cut off.
Catholic Charities said the shutdown will affect its bottom line, but not its mission.
“The work continues, but we are not getting paid,” said John Noonan, a Catholic Charities spokesman.
His organization has had, for several years, a contract with the Federal Bureau of Prisons to work with former inmates. Noonan said Catholic Charities helped 29 clients in Waterbury and 33 clients in Hartford in 2018, most of whom lived in halfway houses.
The Bureau of Prisons if part of the U.S. Justice Department, one of the agencies closed because of the shutdown. Catholic Charities expects to be reimbursed for its services when the government is reopened.
Eversource is paid hundreds of thousands of dollars by the Bureau of Prisons to provide natural gas service to the federal correctional institution in Danbury. And the city of Danbury has about $1.5 million in contracts this year with the Bureau of Prisons to provide water and waste treatment services at the prison and ambulance service for its inmates.
The Justice Department said it will continue to pay those expenses from “carry over” funding from previous years.
But not all agencies have carry over money. The Federal Emergency Management Agency, for instance, has issued a “stop work” order to all contractors, telling them they will not be paid.
Connecticut businesses also have contracts with the U.S. Department of Agriculture, the U.S. Treasury, the U.S. Transportation Department and other agencies that are worth hundreds of millions of dollars. Some of those contracts could be in jeopardy, especially if the shutdown continues for weeks and even months.
If the shutdown had included the Pentagon, it would have had a much greater impact on states like Connecticut with robust defense industries.
But even the defense industry is becoming concerned about the impact of the shutdown because many defense companies have contracts with other federal agencies that are closed, including the Coast Guard and U.S. Customs and Border Protection.
Bloomberg has estimated that federal contractors are potentially losing out on $245 million each day the shutdown continues.
The shutdown’s impact on businesses prompted the U.S. Chamber of Commerce to send congressional lawmakers and the White House a letter this week urging them to “restore the full operation of the federal government.”
“The shutdown is harming the American people, the business community, and the economy,” the chamber said.
The letter contained a long list of the shutdown’s impact on commerce, including the inability of small businesses to get help from the Small Business Administration, the suspension of reviews of mergers and acquisitions, delays in mortgage approvals and for payments on goods and services provided to the federal government.
“Federal rulemakings are halted, and hundreds of thousands of federal employees and contractors go without pay,” the chamber said. “With each passing day, the situation will only get worse.”
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