October 10, 2013

Shutdown slams small federal contractors

Delayed government contracts, work and revenues are tough on small businesses.

The Associated Press

NEW YORK — The shutdown of the U.S. government is making it tough for small federal contractors like Craig Stowers to keep their businesses going.

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Craig Stowers, Jr., president of Ramarc Solutions LLC, is tapping his company’s line of credit during the shutdown.

The Associated Press

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Stowers is tapping his company’s line of credit because he doesn’t know when it will be paid for work it’s done for the Defense Department.

“I’m juggling funds now, just to keep afloat,” says Stowers, CEO of Vienna, Va.-based Ramarc Solutions, a provider of technology hardware and services for websites, wireless networking, Internet security and teleconferencing. The company gets about 25 percent of its revenue from the government.

Some small contractors have had to lay off employees because there’s no work for them while the government is shut down. Others are dipping into credit lines because they’re not getting paid for work they’ve done, or for goods they’ve shipped. Many companies face longer waits to get contracts approved because federal employees aren’t processing previously submitted bids.

Stowers will have to pay interest charges on his credit line and has no idea yet how much that will cost. He also had to cancel trips for staffers who were supposed to fly to New Mexico to install videoconferencing equipment at an Army National Guard base. He’s not sure if hotel charges and airfares will be refunded.

Small businesses are likely to suffer more than larger ones from the shutdown because they don’t have the financial cushions big companies have.

Even before the shutdown began, small businesses expected it to hurt.

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