Shutdown hit small biz hard

      Small business federal contractors testified in a congressional hearing that they added millions to their debt and struggled to pay their employees during the 35-day government shutdown that ended in January 2019.

      Up to1.5 million contractors may have been negatively affected, and some of those impacts “continue to this day,” Rep. Gerald E. Connolly, chair of the House Oversight and Government Reform subcommittee on government operations, said in his opening remarks.

      Some unpaid invoices extended into March 2019 that had been due in October 2018, according to testimony at the hearing.

      Alba M. Aleman, chief executive if Citizant Inc., a small business providing technology services based in Chantilly, VA, told lawmakers her company was hit hard by the shutdown. She was one of several business owners who testified.

      “Six of the federal programs we serve were immediately halted,” Aleman said at the hearing. “This affected 30 Citizant employees, cut $430,000 of revenue, forced a $200,000 loss in profitability and cost us more than $15,000 in interest expenses as we borrowed against our line of credit.”

      Once the shutdown was over, the company faced long delays in getting paid. Payments stopped for all projects, though the company was contractually obligated to continue to perform. Unpaid invoices continued to climb until March 2019, putting the firm $4 million dollars in debt.

      “I can’t begin to tell you the level of stress and panic that strikes at the heart of a business owner,” Aleman said, adding that she was prepared to withdraw all her retirment funds and savings to keep the business afloat and had signed additional agreements to extend her credit. “We lived payroll to payroll, in fear, and on high alert, begging and pleading daily with our government to please pay our invoices immediately.”

      “When your only customer doesn’t pay you for several months and you have breached your borrowing capacity, you face the dire prospect of filing for bankruptcy and selling off parts of the company for pennies on the dollar. We were within days of having to take such drastic action,” Aleman told the committee.

More information:
House Oversight Committee hearing: https://bit.ly/2WuaUA6

(URLs in Set-Aside Alert have been shortened by the bit.ly URL shortener)

SBA proposes WOSB cert. rule; Wong says certification staff workload may increase 6-fold

8(a) owners allowed $750K

$334B in DOD contracting fraud

Shutdown hit small biz hard

GSA to host FAST in 2020

SBIR/STTR data rights changing

Column: Corporate Transactions and Affiliation Pitfalls

Washington Insider: