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Contractors among those shut out by shutdown

Furloughed private employees out of luck for back pay

By John Fritze, The Baltimore Sun

7:34 PM EDT, October 10, 2013

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Like her colleagues at the National Oceanic and Atmospheric Administration, Tiffany House packed up her desk last week hoping the government shutdown would last only a few days.

But the single mom from Hyattsville will be in a position different from her co-workers when the agency reopens. Because House works for NOAA through a private contractor, she isn't likely to receive retroactive pay.

As Congress considers legislation to provide back pay to an estimated 800,000 furloughed federal workers, far less attention has been paid to contract employees — many of whom work side by side with their agency counterparts.

"We have children and families just like everybody else," said House, 27, who handles payroll and keeps the office running at a NOAA division in Silver Spring. "Even though we're furloughed and we're not getting paid, the bills keep coming."

House does the kind of work frequently handled by contractors. She was placed at the agency by Lanham-based Data Solutions & Technology, which also supplies the government with experts in computers, logistics and aviation.

About 30 of the company's 400 workers have been furloughed. Some of them, including House, have applied for unemployment.

Maryland is home to nearly 15,000 prime federal contractors that together employ about 250,000 people, according to estimates from the state Department of Business and Economic Development. The federal government spent $27 billion on goods and services in the state last year, ranking Maryland fourth in the nation for federal procurement.

The companies handle a broad variety of work, from designing software and protecting computer data to cleaning offices and serving food.

An unknown number of those contractors are without work during the shutdown, now in its second week. While it's difficult to quantify the economic impact, analysts say that having thousands of people suddenly out of work is almost certainly a drag on Maryland's economy. Bethesda-based Lockheed Martin alone is furloughing 2,400 employees, many of them in Maryland.

"The impact in Maryland is just incredible because if the contractors don't go to work, then they're not eating out" or buying other goods, said Mark Amtower, a consultant who helps companies do business with the government.

Attention in Washington has shifted to next week's deadline to raise the nation's $16.7 trillion debt ceiling or risk putting the country into default. Republicans in the House of Representatives offered Thursday to pass a short-term increase in the debt ceiling in exchange for opening talks on a larger budget deal.

It is not clear when federal agencies might reopen.

"Both federal employees and contractors shouldn't be forced to stay at home, unsure of when they will be able to carry out their important work and receive pay," said Rep. Steny H. Hoyer, a Maryland Democrat whose district is home to Naval Air Station Patuxent River and a significant contracting community associated with it.

The House unanimously passed legislation last weekend to provide back pay to federal employees. Though the Senate has delayed consideration of that bill, many Democratic and Republican lawmakers believe it will eventually pass. President Barack Obama has indicated that he would sign the measure.

But there's no similar effort underway for contractors. That is partly because contracts do not allow for companies to be paid if the work isn't performed.

At Glen Burnie-based Convergence Technology Consulting, about 20 percent of the employees found themselves out of work when the shutdown began. The company, with about 65 employees, provides cloud computing services and other technology to defense and civilian agencies.

Some of the workers were able to return after Obama signed legislation approved by Congress that reopened many Defense Department contracts, said Larry Letow, the company's president and CEO. Still, Letow said, many contract employees continue to be affected.

"In some ways, I think they're the forgotten ones," Letow said. "Unless they can make up their hours, they are not given any of this money back."

Government agency officials — not the contractors — typically decide whether a contract will continue during a shutdown and whether employees associated with that contract will be furloughed. Many of the private firms are trying to help workers by allowing them to use vacation days or comp time during the shutdown.

Leonard E. Moodispaw, CEO of the Hanover cybersecurity firm KEYW Corp., said his company is developing a leave bank similar to what many offices create when an employee is sick. About one-third of the firm's more than 700 employees have been furloughed.

"Some of them have been called back and some haven't," he said. "The work they're doing is crucial and it needs to be done."

Keith Tate had the misfortune of starting a new job as a contractor Oct. 1, the first day of the shutdown. The 51-year-old Hyattsville man expected to be sitting through orientation. Instead, he was furloughed.

Now he's waiting a second time for his job to start. And he's watching his savings slip away. Tate had been hired to work as a consultant on several federal youth programs. He was connected to the job by Silver Spring-based FM Talent Source, a recruiting and accounting contractor.

"It's like a hole punched in a balloon. There's air in it, but it's slowly going out," Tate said of his personal finances. "I've never been in a scenario like this."

Nearly 30 percent of the company's 92 employees based in federal agencies have been furloughed. Co-owner Omari Franklin said the 9-year-old firm will be able to weather the shutdown. But he said that might have been different if it had taken place a few years ago when the company was getting started.

"We still don't have an outcome yet," he said. "We still don't know when the government is going to open."

Federal spending has slowed in recent years — even before the deep budget cuts known as sequestration began this year — but contracting has exploded over the past decade as agencies have relied more on private firms to cut costs. The federal government spent $518 billion on goods and services nationwide in 2012, compared with $205 billion 12 years ago.

A similar increase took place in Maryland: The amount spent on contracts here has more than doubled since 2000.

Deborah Scott Thomas, who founded Data Solutions & Technology in 1994, urged Congress to resolve the budget crisis quickly. If it doesn't, she said, the impact on her company and employees such as House will be devastating.

"The stress level is completely raised now," she said. "I'm just praying that it doesn't get worse."

john.fritze@baltsun.com

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