Viewpoint: Federal government must honor all existing contracts
Source: Washington Business Journal
As policymakers seek to stimulate the U.S. economy, they are neglecting one of the easiest ways to ensure liquidity to business and reassure Americans – announcing the federal government will honor all existing contracts.
The federal government spends about $1 trillion with government contractors. While the image that springs to mind are large multibillion-dollar defense contractors, there are small and mid-sized government contracting businesses all across America. Whole communities are sustained by these busy government contracting firms who handle IT, sustain logistics or treat sick children. There are more than 1,300 service-disabled, veteran-owned small businesses with federal contracts right now.
My company works with these small and mid-sized government contracting companies, and many are already receiving stop-work orders. When their federal contracts are stopped, these companies are not paid and therefore the personnel they employ or subcontract to are fired, laid off or sit on the payroll burning up resources.
Recently, a memo from the Department of Homeland Security identified workers essential to maintaining critical U.S. infrastructure amid the COVID-19 pandemic. Ellen Lord, Defense undersecretary for acquisition and sustainment, identified contractors considered integral to maintaining the defense industrial base. The list included, but was not limited to, aerospace, mechanical and software engineers, manufacturing/production workers, IT support, security staff and personnel, intelligence support, among many others.
There should be no distinction made regarding which contracts should be honored. All government contractors and their workers are critical now — both for the products and services they provide, but also to preserve the soundness of our economy. This $1 trillion expense is already included in the federal budget. With the confusion, instability and crisis in the country right now, a message from the federal government that all of its contracts will be honored and paid would be reassuring and restore confidence to this important sector of our economy.
Read CEO Sharon Heaton’s full article here.