What Will Be the Outcome of the Government Shutdown?
Russell Smith | January 22, 2019
Nearly none of the industry analysts expected we would have a government shutdown. After it happened, many predicted it would last a few days, or a week or two.
This shutdown is both better and worse than previous ones. Whereas previous shutdowns affected most of Government, this one affects only 25% of the spending because the DoD and many other departments and agencies, totalling 75% of the spend, had their budgets enacted in late September. However, this one is longer than previous shutdowns.
No one yet has a clear view of how the crisis will end. It is obvious we are facing this crisis because of divided government; headstrong politicians; and the fact that the two parties are, according to historians, more polarized than at any time since Reconstruction (1865 – 1876).
The effect of the shutdown on service contractors in civilian agencies and their proposal personnel has been dramatic. Additionally, even in the DoD space, business is slower due to the toxic political atmosphere.
In spite of the fact the two parties are still far apart, we predict the politicians will be able to find a compromise on the budget in the next week or two. However, there will be a continuing lag before civilian RFP releases move forward due to the planning process and rescheduling that needs to take place.
The likely net net result is that civilian program solicitations will not be able to move forward at the usual speed for another 4 – 6 weeks. A market set to take off early because of the September appropriations for many federal agencies should be at a normal position by early March.