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Shutdown Screws Small GovCons
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Written By: BOOST, LLC
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.
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ED STUCKY
EXECUTIVE BOARD MEMBER
Ed has had a distinguished career in government, business and public affairs spanning over forty years. He served in the Reagan Administration at the U.S. Customs Service, Treasury Department and White House. After leaving government, he advised clients on public affairs strategies related to economic policy. Mr. Stucky holds a degree in Business Administration from the University of Kansas, has served on numerous non-profit boards including the Mid-Atlantic Operation Hope Board, the Lewinsville Presbyterian Church Foundation Board and the National Presbyterian Church Fund for Charitable Giving. He currently serves on the boards of ACG National Capital and RAM Veterans Foundation which launched Charities for Vets.
TIM GILMORE
Tim has served as Chief Financial Officer for several companies. Most recently he was CFO of AVCARD, an aviation fuel reseller with over 3,000 customers, over 7,000 suppliers and multiple aviation fuel supply contracts with the U.S. Government. Prior to that, he was CFO of American Port Services Plc. a publicly traded owner and operator of marine terminals and Fixed Base Operators at major airports in the U.S. Mr. Gilmore holds a degree in Business Administration and Accounting from the University of Maryland and a Master's Degree in Business Administration/Taxation from the University of Baltimore and is a Certified Public Accountant.
KATIE BILEK
Katie is Partner and Co-Founder of govmates, an innovative teaming partner platform for government contractors. Prior to govmates, Katie served as SVP of Republic Capital Access. Katie began her career at Goldman Sachs in Equity Sales & Trading on the West Coast. Katie holds dual degrees in Finance and Spanish from the University of Texas at Austin. As the spouse of a veteran, she is passionate about SDVOSB advocacy. Katie is the recipient of the SmartCEO Banker of the Year and the Washington Business Journal Minority Business Leader Award. Katie lives in Alexandria with her husband Beau, son Jackson, and daughter Brooke. She holds Series 3,7,63 and 65 licenses.
MATT STAVISH
Matt began his career in intercollegiate athletics at the University of Virginia in 2003, moving to Washington and Lee University, and finally Temple University. He transitioned to Novartis Vaccines in 2011 to focus on public health and immunization practices. At Novartis, Matt held several roles in sales, marketing, and management. Matt holds a degree in Chemistry from Washington and Lee University, a Masters in Chemistry Education from the University of Virginia, and a MBA in Finance and Innovation Entrepreneurship from the Northeastern University D'Amore-McKim School of Business. He resides in Leesburg, VA with his wife, Kate, and their daughter, Harper.
Noel M. Strauss
Since joining Stephens in 1994, Mr. Strauss has handled transactions totaling more than $30 billion. Before joining Stephens Capital Partners in 2007, he managed Stephens Inc.'s Transaction Development Group, where he oversaw both the Mergers & Acquisitions and Private Placement practices. He serves as a director of Alpha Media, AVL, Snap Advances, SupplyOne and Women's Marketing. Mr. Strauss holds a BSE in industrial and operations engineering from the University of Michigan.
HONORABLE KENNETH J. KRIEG
Ken is the founder of Samford Global Strategies, a consulting practice that specializes in helping companies manage strategic change. Prior to founding Samford, Ken served in a number of defense and foreign policy capacities, most recently as Under Secretary of Defense for Acquisition, Technology and Logistics; Special Assistant to the Secretary of Defense and Director for Program Analysis & Evaluation; Executive Secretary of the Department of Defense Senior Executive Council; and positions at the White House and the National Security Council Staff. ​ Ken also has extensive private sector experience where he served as Vice President and General Manager of International Paper's $1.4 billion Office and Consumer Papers Division. He received his BA degree in history from Davidson College and his Masters in Public Policy from the Kennedy School of Government at Harvard University. Ken sits on several Boards of Directors – API Technologies; Twisted Pair Solutions; Aurora Flight Sciences; and JackBe. He also serves on the Board of Trustees of LMI; the Proxy Board for DRS Technologies; the Advisory Board of Enlightenment Capital; is an Executive-in-Residence at Renaissance Strategic Advisors; and is a fellow at the Center for Strategic and International Studies and the Center for Naval Analyses.
HONORABLE RONALD R. SPOEHEL
The Honorable Ronald R. Spoehel is a private investor with a concentration on tech start-ups and innovation. Ron's career in the private and public sector includes serving as Chief Financial Officer of NASA and senior positons with Harris Corporation, ICF Kaiser International, Acer Group, Optinel Systems, ManTech International, and ICx Technologies, as well as serving on U.S. and international investment fund and advisory Boards in North America, Latin America, and Europe.
Ron has also served on the U.S. Chief Financial Officers Council, the U.S. Air Force Audit Committee, the Board of Directors of the Professional Services Council, Advisory Council for the Wharton and Engineering Schools at University of Pennsylvania, and is a member of the Economic Club of Washington. D.C. Ron began his career in investment banking at Bank of America and Lehman Brothers, focusing on technology and energy sectors. Ron is magna cum laude graduate of the University of Pennsylvania, where he received his Bachelor of Science degree in economics, holds a MBA from the Wharton School, and Master of Science degree in engineering from the Moore School of Electrical Engineering.
ISAAC ELLSWORTH
Isaac attended Georgetown University on a football scholarship, graduating with a Bachelor of Science in Economics. In addition to his academic achievements, during his senior year Isaac was named Georgetown Special Teams Player of the Year, was selected to the Second All-Patriot Team as a running back and kick returner, and made the Patriot League Academic Honor Roll. Most recently, Isaac served as the Youth & Young Adults Leader for Holy Trinity Church in McLean, Virginia.
STEVEN J. SCHWARTZ
Steven J. Schwartz is an attorney and certified public accountant with diverse and robust experience. For over 35 years, Mr. Schwartz has been chief financial officer and general counsel to a diversified group of companies involved in general contracting, construction, real estate development, property management, broadcasting, telecommunications, software development and wholesale distribution.
Mr. Schwartz is also the founder and Portfolio Manager of Prudent Capital, a capital provider started in 1999. Prudent Capital has financed over $100 million of deals and is currently investing its third mezzanine debt fund and 8th preferred equity fund. Prudent Capital's mission is to provide profitable, later stage operating businesses with cost-effective capital to facilitate acquisitions, redemptions of owners, leveraged management buy-outs and growth capital.
Mr. Schwartz served as a Director of a community bank from 1995 until its sale in 1998. In addition, since 2002, Mr. Schwartz has served on the Board of Capital Bank, NA. (CBNK) and has been its Chairman since 2020.
Prior to these activities, Mr. Schwartz practiced law for three years with the firm of Tucker Flyer (now merged into Venable) and practiced public accounting for five years with the firm Aronson and Company. He received a Bachelor of Arts degree in economics from the University of Maryland and a law degree with honors from the University of Maryland School Of Law.
Even though Mr. Schwartz is an attorney and certified public accountant, he has been very successful.
CRAIG R. REED
Craig has over 35-years of experience in government contracting with both publicly traded and privately held government contractors.
He has held senior executive positons at Altamira, Serco, NT Concepts, Engility, DynCorp, Northrop Grumman and Lockheed Martin. Craig has also served as senior policy advisor to the Secretary of Energy. Craig is the founder of Growth Strategy Leaders, LLC, a boutique strategy and transaction advisory firm, and President-elect of the Association for Corporate Growth National Capital Region.
Craig holds a Bachelor of Arts degree in Political Science and Psychology from the State University of New York at Albany, a Master's degree in International Affairs from Columbia University's School of International and Public Affairs, and a PhD in Public Policy and National Security Studies from George Washington University.