The IT implications of a government shutdown

Many federal technology, software contractors will lose work and revenue

With no deal reached between the White House and congressional leaders as of late Thursday night, there's a very good chance the federal government will shut down on Saturday.

The implications of a partial government shutdown -- the first since two separate shutdowns in the mid '90s during the Clinton Administration -- have been discussed in the media for days. Most reports have focused on which government services will be temporarily unavailable to Americans, whether military personnel will get paid and -- most important of all! -- which political party "wins" or "loses."

While the prospect of approximately 800,000 "non-essential" federal workers being furloughed and deprived of their paychecks may delight Tea Partiers everywhere, a shutdown also would have a negative impact on thousands of independent contractors who do work for the government. And that includes IT and software companies.

CNNMoney has a good article that discusses the effects of a shutdown on several tech contractors, including IT services providers MicroTech and Lanmark Technology and software vendor ImmixGroup, all located in northern Virginia.

MicroTech, for example, has $180 million in contracts to provide IT services to numerous government agencies. CEO Tony Jimenez says while the MicroTech workers who support the military should be safe, it's unclear whether many others will be forced to stop working. But the problem goes beyond how long his employees will be sidelined. As CNNMoney reports:

If the government's financial officers aren't around to cut checks, MicroTech won't get paid for invoices it submitted 30 or 60 days ago.

ImmixGroup co-founder Steve Charles says the threat of a government shutdown began to hurt his company's business as far back as February because the lack of certainty made it difficult for deals to be finalized.

Lanmark CEO Lani Hay "estimates that around 25% of her 200 employees would be considered key personnel by their contracting agencies and be kept on through a shutdown," according to CNNMoney. But that leaves 150 others twisting in the wind.

Beyond the impact on independent IT and software contractors, the government shutdown will affect federal agency websites. They won't disappear, but neither will they be staffed or updated.

And, of course, the 800,000 federal workers (about 40 percent of the federal civilian workforce) certainly include thousands of IT professionals who won't be getting paid or providing tech services while the government is shut down.

This possibly could make the federal networking infrastructure vulnerable to potentially damaging malicious attacks, since fewer IT security workers will be available to detect and respond to them.

Finally, good news or bad, depending on whether you're in line for a refund: Tax returns filed electronically will continue to be processed, with checks sent out and payments collected automatically.

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