Shutdown Screws Small GovCons

I normally never write about politics, recognizing that half of my network leans one way, while the other half leans the other.  I tend to live by the “no politics or religion” in public domain, school of thought.  But this latest shutdown has me completely livid over its stupidity and its potential impact on the small GovCon world.

While government employees will enjoy a day or two at home and will eventually receive their backpay for doing absolutely nothing (to be fair, through no fault of their own), small govt contractors will not fare as well.  Those deemed non-essential will generally be forced to use their PTO to stay at home while the work piles up.  Given the last-minute call, few companies have their act together enough to deliver all day training sessions for their employees today to use their overhead dollars wisely.  Outside of PTO, it’s leave without pay (LWOP) as generally, we can’t put your expense on overhead, driving our multiplier up and our competitiveness down.

While a day or two (which hopefully all this is) won’t kill any company, the more it lingers, and the more uncertainty, the less willing smaller companies will invest, hire employees or make decisions.  The indecision of the government funding grinds most smaller companies to a halt.  Small business does not have the cash reserves that the billion-dollar club has.  They are subjected to pay-when-paid terms as subs, and there’s no one in the government paying contractors, so cash dries up.  Back in 2013, the impact of 16 days of shutdown wiped out net income for the year.  If you were living month to month on 4% profits, just one pay period worth of not billing was devastating.

Enter January, when PTO balances are reset, and lower due to the holidays.  Credit card bills from the holidays are due this month.  New hires have just started with the new year with zero PTO built up.

The talking heads blame each other and throw out the military and payment but to be honest, they will be fine.  They will receive their paychecks.  As will the hundreds of thousands of government officials who stayed home today.  They will come back to more backlog (thank you for all the hiring freezes).  RFP releases, contract awards, and payments will all be postponed, directly impacting contractors.

Large GovCons will weather the storm, utilizing their cash reserves, blaming the shutdown for poor earnings reports and postponed contract execution.
Small GovCon, you will be screwed should this last any length of time.

And don’t even get me started on passing another CR.

Life’s too short to work with jerks

Much like everything in the GovCon industry, successful partnerships are based on relationships.  Overused expression, but it’s true.  What are the qualities you should look for in a partner? What makes you want to team with someone (whether directly on an opportunity or in the B2B world)?

TRUST

Most important is trust. Do you trust the person that you are considering working with?  Do you trust that they have the authority to keep things tight on their end (how many times have you worked with a junior BD person who negotiates workshare, only to have contracts screw you later)? Can they correct issues when they arise?  Do they have your back?  Are you worried about bringing them into outside meetings?  If you find yourself only providing half the story to them, or not cc’ing them directly with the client or prospect, something’s not right.  Either you aren’t acting above board (and why not?) or you instinctively don’t trust them.  Figure that out.

HONESTY

Different than trust in that you must ask yourself if the person is upfront with you.  Can they really do everything that the SOW says?  Or are they honest about their company’s shortfalls?  Do they turn down opportunities that aren’t a good fit for them?  Are they going to go rouge and directly contact the end client without communicating with you ahead of time?

COMMUNICATION

This is the heart of practically any human issue.  Can you effectively communicate?  Your styles may be different, but do you understand what the other is saying completely?  Do they go dark on you?  Do you understand their language?

LIKEABILITY

Unless you are a glutton for punishment (who are we kidding, you are a little if you are in GovCon!), part of what makes relationships work is the fact that you just plain like them.  Why spend your time, resources or even mental energy on someone you don’t like?  Life is too short to work with jerks.  And as a business owner, you didn’t get into business to deal with people you don’t like.  Just the opposite.

What’s interesting is that the above is applicable towards finding new friends, new romantic partners, new relationships.  Why treat your business relationships any differently?
Cycle out the relationships that don’t work and focus your energy on expanding the ones that do.

If you’re looking to forge new, successful partnership this year, reach out! I’m happy to recommend a few of the greats! [email protected]