Will GSA Operate During a Government Shutdown?

Will GSA Operate During a Government Shutdown

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April 8, 2011

WILL GSA OPERATE DURING THE GOVERNMENT SHUTDOWN?

It looks like there's no budget deal coming any time soon as Democrats and Republicans continue to argue over the scope and depth of budgets cuts and deficit reduction. And those of us counting on President Obama to mediate the dispute and forge a compromise are now conceding the reality of the situation. The fact is that the Government Shutdown is here and at least part of the Federal Government will close until a compromise can be reached.

So what happens to the General Services Administration or GSA which is basically a self-perpetuating institution that relies on the IFF fees it collects rather than traditional Government Appropriations? We sat down to discuss this unique situation with Kevin Chace, President of Nu Cen-tury Inc. a company which specializes in marketing to the Federal Government. Mr. Chace's company Nu Cen-tury Inc. helps businesses secure GSA Contracts and the further aids them in their efforts to negotiate the tricky process of Federal Marketing.

"Well, we have advised existing clients of Nu Cen-tury Inc. that in most cases, things will be business as usual with their GSA Contract. You need to remember that GSA is essentially a quasi-Governmental institution and that less than half of the overall GSA budget comes from Government appropriated funds. Of course, that also means that a significant part of the overall GSA budget IS tied to other Governmental Agencies, which is important to remember."

And Mr. Chace is correct. In a public statement this morning, Martha Johnson of the GSA explained that the Federal Acquisition Service would in fact remain functional for the foreseeable future. But she did indicate that the impact on other Federal Agencies would have an indirect impact on GSA.

Mr. Chace added, "While I certainly don't see the harm in contacting your contracting officer, we have advised clients of Nu Cen-tury Inc that such actions are voluntary and not essential in light of the positive comments coming out of GSA. Basically, if it makes a contractor feel more secure they should go ahead and call their contracting officer. But it's more about piece of mind than anything else."

And what about the impact on other Government Agencies? What does that do to GSA? According to Mr. Chase, "Well, that's complicated. GSA may be self-sustained in that they don't receive Appropriations in the same manner as other agencies, but you need to remember that they rely heavily on funding from purchases made by the other agencies that ARE dependent on Appropriations."

So what Mr. Chase is saying is that even though GSA pays their own bills, the money they make is heavily dependent on the purchases of other agencies that will be "broke" during a Government Shutdown. GSA relies heavily on purchases made by Defense, Transportation and Energy Departments. If those Departments are shutdown, they can't spend money and that impacts GSA's operating budget. And that fact makes it difficult to speculate on the potential impact of a Government Shutdown on GSA. But according to Mr. Chase of Nu Cen-tury Inc, "Martha Johnson of the GSA stated that they learned a lot from the Government Shutdown of 1995 and that left GSA in a better position to be prepared for this similar emergency. Apparently that means they have reserve funds that will keep them operating at a reasonable level during this unique situation."

Author:

Casey Dorgood

April 8th, 2011

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