With at least a partial shutdown of the federal government looking likely, security contractors working on projects for the federal government should step up their communication with project managers and prepare for worst-case scenarios.
Congressional lawmakers negotiated throughout the day Thursday in hopes of reaching an acceptable deal on approving federal appropriations bills. But most observers don’t seem optimistic the impasse will be resolved before the fiscal year ends Saturday.
For integrators who are dealing with government contracts, even if the General Services Administration is not furloughed, they may not have physical access to properties to get work done.
“I would be reaching out to my project managers to see what the contingency plan is for the work that is planned,” says Lynn deSeve, president and founder of Annapolis, Md.-based GSA Schedules Inc.
“Make sure you have a good way to reach these folks if you’re locked out of the site. Is the project critical to the security of the location, or to keep things running? Do the integrators need to help their contact justify certain parts of the project? Do they have staff on duty to help with essential actions?”
In conjunction with the Office of Management and Budget, every agency in government maintains a contingency plan for a lapse in appropriations that includes which work it will continue to conduct despite not receiving annual funding, as well as which employees it will require to continue working to carry it out.
According to a Government Executive analysis of the most recent data, the Biden administration plans to furlough about 737,000, or 34%, of civilian federal employees. The remaining 1.4 million workers would continue to report for duty on only the promise of back pay.
Federal department heads have said some employees may face furloughs initially and then be forced to come back if a shutdown drags on, as more work will reach a crisis stage.
In June 2023, with bipartisan support in both the House and the Senate, Congress adopted the Fiscal Responsibility Act, which removed the federal debt ceiling and established new spending limits for annual appropriations.
At the time, it was anticipated that these limits would define the overall scope of the 12 annual appropriations bills and that Congress would proceed to pass them at the agreed-upon levels and avoid a shutdown.
In a detailed blog post, Security Industry Association Associate Director of Government Relations Colby Williams laid out some of the potential ways a government shutdown would impact the industry, which are summarized here:
- Security companies that contract with the federal government for services such as cybersecurity and physical security could face delays in contract payments, gaps in service and communication with federal agencies, and even disruptions with implementing new or existing projects. This would not only create a strain on the financial resources of the company “but also create gaps in the integrity of security services and products,” SIA said.
- A shutdown means most agencies would have to reduce staffing levels, including those responsible for the administrative side of some cybersecurity and physical security projects and oversight, leading to potential vulnerabilities in processes and procedures -- as well as a lack of particular federal resources.
- A shutdown could disrupt funding and management of research and development in the security sector, including technologies related to homeland security and public safety as well as national defense.
- Additionally, SIA says, agencies with regulatory oversight or permitting authority play a crucial role in setting and enforcing security standards and procedures. A shutdown can slow or even halt their ability to carry out regulatory oversight, halts access to federal permits and loans and could impact the ability for security companies reliant on federal security standards, projects, and procedures to operate.
‘A Lot Worse’
deSeve says the GSA workers her firm interacts with won't be furloughed, which was the same situation as the last shutdown. In 2018’s furloughs, deSeve says, some funding had already been approved so some work carried on – “but this time that’s not the case. And of course, it’s a different administration too, and how they will handle it.
“The challenge will be for people trying to get in on the site to do the work. I have concerns for my clients that have work ongoing, that there's going to be delayed payment, and that they're not going to be able to get on-site to get things done on time. And that's going to have a bigger impact on small businesses, of course, that don't have the float that a larger company has.
“What if you've ordered supplies and it comes in and you get the bill for it and you can't bill the government? So that's a challenge. Most people consider what's about to happen going to be a lot worse than last time.”
Tom Giermek, Vice President of Business Development & Capture at Convergint Federal, says integrators are currently in a "wait and see" pattern.
"There is, however, no ‘shut down’ for security systems that are integral to public safety and national security," Giermek added. "As the global leader in security integration, Convergint remains focused on best practices in the face of any environmental challenge. Convergint Federal continues to work with its customers to ensure that all systems remain fully operational and optimized.”
Security vendors are also working to mitigate the potential impacts of a shutdown. Eagle Eye Networks CEO Dean Drako says the company is monitoring the situation and "ensuring an open line of communication with our resellers. He notes the "immediate and unfortunate effect" of a government shutdown is that many government security projects being put on hold.
"Delays in government security projects will have a negative economic impact on security integrators and the broader economy," Drako says. "A government shutdown has other implications as well, including making it more difficult for the federal government to maintain optimal physical and cybersecurity posture across facilities and operations.
"Communication with our resellers is the best action a manufacturer can take under these circumstances."