Solution Providers Want Out Of Public Sector After Government Shutdown

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After the sequestration and now the shutdown, many government solution providers are throwing up their hands with plans to turn toward the private sector while others are holding fast and hoping for a more stable future.

The federal government shutdown went into effect Monday at midnight after the government failed to come to a compromise on a spending bill to fund the government, which resulted in hundreds of thousands of "non-essential" workers being told to stay home and frozen government funds.

The biggest effects on solution providers will be seen if the shutdown continues for more than a few days, said Bill Gleich, president of Jeskell Systems, which does more than half of its business with the government. Gleich said that for now, companies can make do, but they will start to struggle as contracts go unpaid and no new contracts can be signed.

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"It certainly makes the nonfederal markets attractive," Gleich said. "There's more consistency and visibility about the future. There's more clarity in doing business with commercial entities because of the dysfunction that is going on with the government right now, or more specifically that is going on with Congress."

Dennis Jeter, president of A Sound Strategy, Inc., said his company has already transitioned away from working with the government after the sequestration took effect earlier this year. His company lost two large army contracts because of the uncertainty around the sequestration.

"We made a decision to not focus on government as a vertical. We literally just shifted all of our energies and focus onto SMB market. That’s what we've been trying to do. Government was so nonfunctional that it was impossible to get contracts," Jeter said.

The other problem going forward is that events such as the shutdown will discourage new talent from venturing into the public sphere, said Steve Halligan, COO of n2Grate Government Technology Solutions.

"If people feel annually that they're caught up in bigger issues outside of their control it has an impact on desirability of the next generation of federal workers," Halligan said. "It will be a huge detractor to attracting top talent."

Between the pay freezes and furloughs for government employees, Halligan said that the reputation of working with the government is affected as future talent may look elsewhere. The unstable environment affects job stability, benefits and pay raise expectations, he said.

NEXT: The Silver Lining, Who's In It For The Long Haul

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