Why impeachment matters to government contractors

Prevailing wisdom on both ends of the political spectrum says the removal of President Trump from office through the impeachment process is unlikely.

But the process is well underway and with it the risk to the Trump presidency is real.

With that in mind, I reached out to several executives and corporate board members with the simple question: If President Trump is removed, how will it impact government contractors? If Trump is forced out, what kind of transition would there be? Would it be chaos?

To a person, everyone I asked said the direct impact of an impeachment and removal of a president would not have a significant impact. Political appointees would remain in place.

“There would be a rallying around Pence,” one person told me, referring to Vice President Mike Pence, who succeed Trump.

But that doesn’t mean contractors don’t face a risk tied to impeach. All of the people I spoke with said they fear the impact on getting a budget passed.

“What I am more worried about is the disruption,” said one person on the board of directors at a large, publicly-traded government contractor. (I’m not using people’s names or other identifiers so they would feel freer to speak.)

The disruption and distraction of the impeachment proceedings increase the risk of a government shutdown. If the House and the White House are at such odds, will they be able to reach a budget agreement?

Agencies are operating under a continuing resolution that ends Nov. 21. The expectation is that an extension will be signed pushing it to December. But no one is predicting what happens after that.

By then, the impeachment hearings in the House will be drawing to a close. Is it possible for the House to draft and approve articles of impeachment, even at the committee level, and still negotiate a long-term budget agreement with the Senate and the White House?

“I could see a scenario where the impeachment process continues, the President gets increasingly (annoyed), and basically refuses to sign any agreement,” one person told me.

Impeachment, even if it never gets out of the House, could be the final roadblock to a fiscal year 2020 budget deal.

So what is there for a contractor to do? Prepare for a shutdown.

The Professional Services Council has already held one webinar on how to prepare for a shutdown and is offering lessons learned from the 35-day partial shutdown earlier this year. Both government and too many contractors were not well-prepared for that one. Communication between government and industry was poor as well.

PSC’s message is for contractors to talk to their customers and gird themselves for the worst. Among their advice:

• Know where your workers are. At a government site, they might be locked out. But at your site, they might continue to work.
• Understand what kind of leave and vacation time your employees have.
• Understand the requirements of labor laws such as the WARN Act and understand any labor agreements you might have.
• Determine the status of your contracts. What activities are in the pipeline?
• Are your invoices up to date?
• Can you take advantage of accelerated billings and pay options?

Above all else, don’t wait. It is easier to stop your preparations than to start them when the crisis has already begun.

An impeachment and removal of the president is highly unlikely. But the threat of a shutdown is very real. Prepare accordingly.