byline: Dustin Siggins

Government contractors lost millions of dollars during America’s longest partial government shutdown. The impact was felt across the country, especially among small contractors and low-income employees who are not likely to receive back pay from Congress.

The damage from the 35-day shutdown during December and January has inspired many executives to change how they do business. According to AFCEA, some contractors are abandoning the traditional practice of focusing on a handful of government agencies as clients. Instead, they are broadening their scope of potential clients through a wider array of agencies and/or aiming at private-sector customers.

Contrary to Vince Lombardi’s adage that “winners never quit,” these contractors are quitting to win. They are abandoning the traditional government contractor business model because of a dynamic assessment of risk versus reward in a time of uncertainty. Their wisdom will help their companies thrive when the rest of the industry struggles through the next government shutdown.

These leaders are also providing an example to the rest of the business world on the value of quitting practices that are no longer of value or are detrimental to a company’s success. For example, MSD Advisors CEO Mary Sue Dahill will tell entrepreneurs at a Northern Virginia Chamber of Commerce event on May 14 how they can scale and grow their businesses through using technology instead of working excessive hours.

“I would like small business owners to quit working so hard!” Dahill told me. She said that “many small business owners fall into the trap of working excessive hours or hiring expensive staff when they can simply leverage technology to automate routine business matters.”

Just as people quit bad personal habits after a heart attack or stroke, contractors who expand their client base are being self-disruptive for professional health. They are refusing to stick with ways that aren’t working and are detrimental to their futures.

U.S. Sen. Mark Warner of Virginia is an expert at quitting to win. An entrepreneur and investor before entering public office, he told me that failing at two businesses before the age of 30 “taught me that there is something courageous about knowing when to walk away.”

According to Warner, while “there is is virtue in commitment and seeing things through,” that is not always the right answer. “Sometimes, quitting means having the integrity to admit that something isn’t working, and the courage to try something new,” he said.

The principles espoused by government contractors, Warner, and Dahill are those which helped Mike, the owner of an automobile services company, rapidly grow his revenue. “Mike was a client of mine, and he regularly struggled with low revenues from December to March,” Susan Trivers, CEO of Trivers Consulting Group, told me.

“He finally invested in a highly-skilled front-desk representative despite 20 years of having lower-skilled staff in that position,” she said. “While that person cost twice as much to employ as past front-desk representatives, within a year that single change in staffing increased revenue by five times the extra cost.”

Alas, not every company is willing to have the courage to see the writing on the wall. Sometimes these are Mom-and-Pop shops which stick with what they’ve always done. Other times, they are billion-dollar corporations like Blockbuster.

Fifteen years ago, Blockbuster was the king of video. Six years later, the company declared bankruptcy because it had doubled down on what it had always done — rent videos from brick-and-mortar stores.

In contrast, Blockbuster’s competitor Netflix adjusted to the changing economy. Founded as a company which mailed DVDs to homes, Netflix transitioned to a streaming service that sent movies directly to TVs. Last year, Netflix had revenue of nearly $16 billion — while as of this April, just one Blockbuster location is still open.

“Many of my clients tell me, ‘we’ve always done it this way,’” said Trivers. “They so often confuse quitting ineffective business practices with ditching company or personal goals.”

Unlike Blockbuster, many government contractors are setting themselves up for long-term success. They are ready to do what it takes to win -— by quitting practices which aren’t working, and by opening their minds to new ways of thinking and growing. 

Dustin Siggins is owner and founder of the Kingstowne-based publicity firm Proven Media Solutions,  http://provenmediasolutions.net

Another month, another near-shutdown of the federal government. There have been 21 shutdowns since 1976, according to CBS. The most recent one lasted 35 days – a record length. And others are likely on their way.

Significant attention during the recent shutdown was focused America’s 2.1 million federal workers. Eight hundred thousand employees went without pay until the government was reopened. While federal employees often paid more than their private-sector counterparts, going weeks without a paycheck is difficult for most households.

Federal employee back pay sharply contrasts with how government contractors are not receiving back pay. There are more than 3.7 million contractors, according to a 2017 paper by Professor Paul Light, an estimated 1 million of which CBS reported “are unlikely to get back pay” from the recent shutdown.

This means that while all federal employees will get paid for unpaid time during the shutdown, more than 25 percent of federal contractors will not. And even contractors’ best chance for back pay won’t help all contractors. Sen. Tina Smith’s (D-Minn.) back pay bill would provide pay to contractors who make $965 per week or less.

The political difficulties of contractor back pay are exacerbated by the fact that many contractors are seen in negative lights by liberals and conservatives alike because of issues such as poor oversight by Congress and reports of fraud.

The impact of the shutdown on contractors became clear to me during a panel at The Tower Club at Tyson’s Corner, where I am a member. Panelists included Northern Virginia leaders – a contractor, an accountant, an attorney, a banker and two Fairfax County officials. They described a number of difficult situations faced by NOVA-area contractors – such as loans being delayed or denied, lines of credit being unavailable, contract completion dates being delayed, and layoffs.

Sid Jaffe, a Tower Club board member and founder of Sid Jaffe & Associates, was the contractor on the panel. He recently told me in an e-mail that back pay for contractors is more difficult than for federal employees because “Congress justifiably wants to pay back lost wages for government employees but has no authority to do that for contractors’ employees” because contractors are privately employed. Given that contractors “make up a large part – if not the majority – of workers, especially in the Washington Metro area,” wrote Jaffe, “it seems…appropriate for the contractors to get…some sort of pay adjustment.”

If contractors want back pay, they clearly have a number of challenges to overcome. From a publicity standpoint, there are five things they can do to gain public support:

First, have a long-term strategy for getting lawmaker and public support for back pay. Start building media and lawmaker relationships now. CEOs should look at these opportunities as investments in a company’s future, not a cost. Yes, some effort goes to waste if a shutdown doesn’t happen for years. But positive branding and widespread support are not gained overnight. They are long-term investments just like marketing and employee retention, and as we’ve seen recently the cost of not preparing can be devastating.

Second, have a crisis communications plan in place. Timeliness is everything on these sorts of issues, so press releases, op-eds, press conferences, videos, and social media posts should be teed up well in advance.

Third, put aside competition. Contractors should work together to create coalitions. Those coalitions should lobby together, launch media efforts together and strategize together – regardless of whether you’re competing for contracts.

Fourth, create a sympathetic narrative through human stories. The word “contractor” evinces little sympathy because the press often talks about “contractors” in broad terms – such as when contractors are getting billion-dollar contracts. Likewise, negative stories about contractors (such as the Blackwater debacle in Iraq) create the impression that contractors are all about money. 

However, most contractors are small business. Many provide critical services, and many are in low-paying fields such as food service or janitorial services. Contractors should emphasize the everyday impact of what contractors do and the everyday impact on “the contractor next door” to get sympathy.

Finally, reach the public directly. Have town halls where your company is located. Sponsor educational events and parades in your community. Find ways that your company’s values fit with your local and regional communities, and emphasize them at every opportunity.

In the end, it’s up to contractors to make back pay a reality. A spokesperson for Smith’s office told me prior to the new budget agreement that the senator “is hopeful that her bill will be included in the budget agreement.” That didn't happen, which means that government contractors have a long, hard road ahead of them on back pay for the last shutdown and any in the future.

Dustin Siggins is a communications strategist and founder of Kingstown-based Proven Media Solutions. He is a former political journalist.