[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


                         GOVERNMENT SHUTDOWNS:
                            CONTRACT KILLERS

=======================================================================

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON GOVERNMENT OPERATIONS

                                 OF THE

                         COMMITTEE ON OVERSIGHT
                               AND REFORM

                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 6, 2019

                               __________

                           Serial No. 116-19

                               __________

      Printed for the use of the Committee on Oversight and Reform
      
      
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                   COMMITTEE ON OVERSIGHT AND REFORM

                 ELIJAH E. CUMMINGS, Maryland, Chairman

Carolyn B. Maloney, New York         Jim Jordan, Ohio, Ranking Minority 
Eleanor Holmes Norton, District of       Member
    Columbia                         Justin Amash, Michigan
Wm. Lacy Clay, Missouri              Paul A. Gosar, Arizona
Stephen F. Lynch, Massachusetts      Virginia Foxx, North Carolina
Jim Cooper, Tennessee                Thomas Massie, Kentucky
Gerald E. Connolly, Virginia         Mark Meadows, North Carolina
Raja Krishnamoorthi, Illinois        Jody B. Hice, Georgia
Jamie Raskin, Maryland               Glenn Grothman, Wisconsin
Harley Rouda, California             James Comer, Kentucky
Katie Hill, California               Michael Cloud, Texas
Debbie Wasserman Schultz, Florida    Bob Gibbs, Ohio
John P. Sarbanes, Maryland           Ralph Norman, South Carolina
Peter Welch, Vermont                 Clay Higgins, Louisiana
Jackie Speier, California            Chip Roy, Texas
Robin L. Kelly, Illinois             Carol D. Miller, West Virginia
Mark DeSaulnier, California          Mark E. Green, Tennessee
Brenda L. Lawrence, Michigan         Kelly Armstrong, North Dakota
Stacey E. Plaskett, Virgin Islands   W. Gregory Steube, Florida
Ro Khanna, California
Jimmy Gomez, California
Alexandria Ocasio-Cortez, New York
Ayanna Pressley, Massachusetts
Rashida Tlaib, Michigan

                     David Rapallo, Staff Director
              Wendy Ginsberg, Subcommittee Staff Director
                   Kristine Lam, Subcommittee Counsel
                     Laura Rush, Deputy Chief Clerk
               Christopher Hixon, Minority Staff Director

                      Contact Number: 202-225-5051

                 Subcommittee on Government Operations

                 Gerald E. Connolly, Virginia, Chairman
Eleanor Holmes Norton, District of   Mark Meadows, North Carolina, 
    Columbia,                            Ranking Minority Member
John P. Sarbanes, Maryland           Thomas Massie, Kentucky
Jackie Speier, California            Jody Hice, Georgia
Brenda L. Lawrence, Michigan         Glenn Grothman, Wisconsin
Stacey E. Plaskett, Virgin Islands   James Comer, Kentucky
Ro Khanna, California                Ralph Norman, South Carolina
Stephen F. Lynch, Massachsetts       W. Gregory Steube, Florida
Jamie Raskin, Maryland
                        
                        
                        C  O  N  T  E  N  T  S

                              ----------                              
                                                                   Page
Hearing held on May 6, 2019......................................     1

                               Witnesses

Panel I:

David J. Berteau, President and CEO, Professional Services 
  Council
    Oral statement...............................................     6

Roger A. Krone, Chairman and CEO, Leidos, Inc.
    Oral statement...............................................     8

Edward Grabowski, President, Local Lodge 2061, District 166, 
  International Association of Machinists and Aerospace Workers
    Oral statement...............................................    10

Alba M. Aleman, CEO, Citizant
    Oral statement...............................................    11

Michael A. Niggel, CEO, Advanced Concepts and Technologies 
  International, L.L.C.
    Oral statement...............................................    13

Panel II:
Jaime Contreras, Vice President, 32BJ, Service Employees 
  International Union
    Oral statement...............................................    29

Anthony Crescenzo, CEO, IntelliDyne, L.L.C.
    Oral statement...............................................    31

Wesley Ford, President, TKI Coffee, Inc.
    Oral statement...............................................    33

Tamela Worthen, Security Officer, National Museum of African 
  American History
    Oral statement...............................................    34

Mark Hall, Executive Vice President, ServiceSource
    Oral statement...............................................    35

*Written opening statements, and the written statements for 
  witnesses are available at the U.S. House of Representatives 
  Repository: https://docs.house.gov.

NO DOCUMENTS WERE SUBMITTED FOR THIS HEARING.

 
                             FIELD HEARING.
                         GOVERNMENT SHUTDOWNS:.
                            CONTRACT KILLERS

                              ----------                             
                              
                              
                           Monday, May 6, 2019


                        House of Representatives

      Subcommittee on Government Operations
                  Committee on Oversight and Reform
                                           Washington, D.C.
    The subcommittee met, pursuant to notice, at 9:10 a.m., in 
room 1201, Merten Hall, George Mason University, 4441 George 
Mason Blvd., Fairfax, Virginia, 22030, Hon. Gerald E. Connolly 
(chairman of the subcommittee) presiding.
    Present: Representatives Connolly, Norton, and Raskin.
    Also present: Representatives Beyer and Wexton.
    Mr. Connolly. Good morning everybody. And welcome to the 
first field hearing of the new Congress of the Government 
Operations Subcommittee of the Committee of Oversight and 
Reform. I want to welcome my colleagues from Northern Virginia, 
Don Beyer from the Eighth congressional District; Jennifer 
Wexton from the 10th congressional District; and our dear 
friend and colleague, the Congresswoman from the District of 
Columbia, Eleanor Holmes Norton.
    Greeting us first will be the president of George Mason 
University, Angel Cabrera. Thank you, President Cabrera.
    Mr. Cabrera. Thank you.
    Thank you so much, Congressman Connolly. Thank you to all 
the members of the subcommittee. It is a pleasure to host you 
at the largest, fastest growing, and most diverse university in 
Virginia. We are very proud to have been reclassified three 
years ago as a Research 1 university in the country. We Are the 
youngest Research 1 in the Nation. And yet we Are fully 
committed to our public mission of access. That is what is 
unique about our university. And we love to be a place where 
the community comes together for important questions, including 
this one. We are one of the biggest producers of employers in 
our leading government contracting companies in the region. So 
the matter being discussed here today matters to our alumni a 
great deal.
    So thank you so much to all the members of the subcommittee 
and to you, Congressman Connolly. Thank you so much, and 
welcome to Mason.
    Mr. Connolly. Thank you so much, President Cabrera. And 
thank you for your hospitality here at George Mason University.
    I want to thank members of the Government Operations 
Subcommittee and, of course, members of the D.C. area 
delegation for coming to this very important field hearing to 
examine the impacts of government shutdowns on contractors. I 
would also like to thank our hosts again for their hospitality.
    Just five months ago, from December 22d through January 
25th, we were in the throes of the longest government shutdown 
in the United States history. President Trump used nearly 
800,000 Federal employees as pawns in what I consider to be a 
ruthless attempt to fulfill a wrong-headed political promise. 
He wanted to build a wall. According to our estimates, an 
additional 1.5 million Federal contract employees may also have 
been affected by the unnecessary shutdown and prevented from 
working and serving the American people.
    Virginia's 11th District, which I represent and where you 
are now, is home to about 55,000 Federal employees, one of the 
largest populations of Federal employees of any congressional 
district.
    But for every Federal worker in my district, we estimate 
there are roughly 1.5 contractors. According to Federal 
contracting data, the agencies affected by the longest gap in 
the funding of government history experienced a drop of 
approximately 75 percent in contract obligations when compared 
to the same 35 days from the previous year. And more than five 
Federal agencies saw reductions in contract obligations of 
approximately $150 million during that same 35-day period.
    Contractors serve important roles alongside Federal 
employees. They respond to citizens in need by answering phones 
in call centers. They analyze classified intelligence 
information. They help maintain agency information technology 
systems. They secure Federal buildings and provide the Federal 
Government and American taxpayers with goods and services. They 
are laboratory technicians. They are machinists. They are 
janitors, cafeteria workers, cybersecurity experts, lawyers, 
and engineers. Our government could not function without them.
    While Federal employees deservedly received backpay when 
the government reopened, Federal contractors did not. This 
disparity is wrong, especially when one considers that, in many 
cases, contract employees are embedded in Federal agencies 
working side by side with Federal employees doing the same 
work.
    Federal contractors and their families should not be 
penalized for a government shutdown they did nothing to cause. 
As a result of the nearly five-week shutdown, Federal contract 
employees lost more than a month's pay and often missed several 
paychecks. Like all of us, these workers have financial 
responsibilities, such as rent or mortgage payments, childcare, 
household bills, medical expenses, not to mention everyday 
purchases such as food and gas.
    That is why I wrote a bipartisan letter, signed by 48 
Members of the House, including our friends here today, 
encouraging the House Appropriations Committee to include a 
provision to provide backpay to Federal contract employees for 
wages lost during the shutdown in any supplemental 
appropriation bill for Fiscal Year 2019 or as part of the 
regular appropriations process in 2020.
    Businesses that contract the Federal Government were also 
greatly impacted by the partial government shutdown. And many 
are still feeling the effects to this day. According for the 
Congressional Budget Office, the effects of the partial 
government shutdown ending in 2019, Federal spending on goods 
and services was about $9 billion lower during the five-week 
shutdown than it otherwise would have been. Additionally, 
private producers that had contracts with Federal agencies that 
were affected by the partial shutdown, and probably their 
employees and suppliers, saw a reduction in income during the 
shutdown.
    When the government is shut down, contractors may lose 
compensation for a number of reasons. First, agencies may issue 
a stop work order freezing the contract to minimize the cost to 
government. Second, during a shutdown, agencies have no staff 
to process invoices for work that was performed and billed to 
the government prior to the shutdown. Companies could also have 
lost income because agencies deferred or canceled new contracts 
due to the uncertainties caused by the shutdown. There are 
likely numerous additional ways in which the partial government 
shutdown negatively affected contractors, and we will explore 
many of them in this hearing today.
    Amidst the turmoil of the shutdown, we also saw how 
companies and coworkers banded together to mitigate some of the 
pain in the gap and funding that was caused. Today we will hear 
from small and midsize businesses who went to great lengths to 
avoid laying off or furloughing their own employees during the 
shutdown. Some used the 35-day partial government shutdown as 
an opportunity to offer their employees additional training. 
Others allowed employees who were not furloughed to donate 
their leave to those who were. These companies also had to 
consider whether to continue paying for a lot of employees' 
medical insurance premiums and any retirement contributions.
    Many businesses did all they could to help their employees, 
but some eventually had to lay people off. Unfortunately, there 
were some small businesses that did not survive the financial 
hardships presented by the shutdown.
    Like everyone in this room today, I hope we never 
experience another government shutdown. However, we do not know 
what the future holds. Therefore, Congress must take action, it 
seems to me, to lessen the impact on contractors, work with 
agencies to improve their communication with contractors ahead 
of a shutdown, and, most importantly, ensure the contract 
employees are able to receive backpay.
    I want to thank all of our witnesses in advance for 
appearing before the subcommittee this morning, and we all look 
forward to hearing from them.
    Now, I call on my colleagues for any opening statements 
they may have.
    Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman.
    I think that more than contract workers are grateful to you 
for this subcommittee hearing today. You and I are on several 
bills to help make up for this. But this hearing is necessary 
to give the facts to undergird those bills and those 
appropriation matters.
    This 35-day shutdown was unheard of in American history. 
Our job is to make sure it doesn't happen again although, of 
course, we were not responsible for it. But one way to do that 
is to make sure that it is clear that everyone who was affected 
by this shutdown is, in fact, made as close to whole as 
possible.
    We are particularly grateful for all of you who are 
witnesses who have come because you are helping us to make that 
record.
    I thank you, Mr. Chairman.
    Mr. Connolly. I thank Ms. Norton.
    Without objection, the chairman is authorized to declare a 
recess of the committee at any time.
    Without objection, the following Members are authorized to 
participate in today's hearing: Mr. Don Beyer and Ms. Jennifer 
Wexton.
    The Subcommittee on Government Operations is convening 
today to hold a field hearing on the effects of government 
shutdowns on Federal contractors. Without objection, it is so 
ordered.
    Mr. Beyer, do you have an opening statement?
    Mr. Beyer. Just a brief one.
    First, Jerry, Congressman Connolly, thank you very much for 
holding this hearing. I think all Virginians, probably all 
Americans, should be grateful for the leadership role that you 
play on Oversight right now. No better person to do that. And 
thank all of you for coming.
    This was some of the hardest days I have ever had in public 
service. You know, all of our government employees, government 
contract employees, and all the people who serve them, you 
know, the car mechanics and the waitresses and the people at 
the car wash and people at the grocery store, everybody that 
wasn't making money during the recession--or during the 
shutdown who could never come back again.
    With my friend Tim Kaine, whom all of you know, we 
introduced a bill in the Senate and the House that would 
propose a solution to avoid all further solutions. It is called 
the End Shutdowns Act. And it sets up a process where, if there 
is a lapse in appropriations, if there is a shutdown, an 
automatic continuing resolution kicks in. And no other 
government activity, no legislation could pass the House or the 
Senate until we open the government again, until the 
appropriations process is finished.
    The theory on this is that we are all sent there to work. 
And to sit there and do nothing day after day after day will be 
incredibly frustrating. So the appropriations come first. It is 
a little different from our pal Senator Mark Warner's 
legislation, the so-called stupid act that denies our pay, 
which is perfectly fine with me except it is probably, A, 
unconstitutional and, B, would never pass. So we think this is 
a more--given that politics is the art of the possible, this is 
a better way forward.
    But I am very committed to working with Congresswomen 
Wexton and Norton and our leader, Jerry Connolly, to make sure 
that we are doing everything we can to make sure that this is 
the last shutdown of our careers.
    Mr. Connolly. Thank you, Mr. Beyer.
    Congresswoman Wexton, do you have an opening statement?
    Ms. Wexton. Thank you, Mr. Chairman. I do, very briefly. 
And I want to thank you for holding this hearing and for your 
leadership on this issue and also thank Congresswoman Norton 
for her leadership on this issue.
    So I have a unique perspective because I am the brand new 
freshman Member of Congress, and I came in--I was--I came in 
with the freshman class in the midst of this shutdown. So that 
was my introduction to serving in Congress as we, day after 
day, passed appropriation bills that went to the Senate and sat 
there and nothing happened.
    But it was also extremely hard for me because I kept 
hearing from constituents about how they were impacted by the 
shutdown. So many people who didn't know where they were going 
to be able to get the money for their mortgage payment or for--
you know, or for food who were having to see about getting 
abatement of their student loans. And some who knew that they 
might never actually recoup the pay that they were losing who 
were contract employees.
    So we need to do better for our employees. We need to do 
better for our contract workers, especially as more and more--
there is more pressure on the government to do more work 
through contract employees. So we need to do better for them. 
And we also need to recognize that--one of the things I have 
noticed in my short tenure on Capitol Hill is that folks in 
Washington have really short memories. And so we need to make 
sure that they do not forget the pain that was suffered by all 
these folks and businesses during the shutdown and make sure 
that it never happens again.
    Thank you.
    Mr. Connolly. Thank you, Congresswoman Wexton.
    Our first panel, let me introduce. First, we have David 
Berteau, who is the president and CEO of the Professional 
Services Council in Arlington. PSC represents more than 400 
members of the Federal services industry. And as CEO, Mr. 
Berteau focuses on legislative and regulatory issues related to 
government acquisition, budgets, and requirements by working to 
improve communications between government and industry.
    Welcome, Mr. Berteau.
    Roger Krone is chairman and CEO of Leidos. And I need to 
reveal that I used to work for the united SAIC before Leidos 
broke off. Leidos has approximately $1 billion in annual 
revenue, 32,000 employees worldwide, and is a leader in 
government IT services and solutions. Despite the size and 
diversity of its business lines, Leidos faced difficult 
management decisions, which we are going to hear about, to 
mitigate the impact of the shutdown.
    Ed Grabowski is president of Local 2061, the International 
Association of Machinists. Mr. Grabowski represents NASA 
contracts in Florida and will tell a variety of stories related 
to contractor hardship, including the layoff notices, 
challenges in applying for unemployment insurance and local 
food pantries helping contractors facing hardship.
    Alba Aleman is chief executive officer of Citizant in 
Chantilly here in Virginia. Citizant is a small business 
offering IT and business solutions to the Federal Government 
with current contracts awarded by DHS, DOJ, and IRS. Ms. 
Aleman--I am pronouncing that correcting, I hope--CEO of 
Citizant, led her company through both the 2013 and last year's 
shutdowns, so she has got a lot to tell us about.
    And Michael Niggel is chief executive officer of Advanced 
Concepts and Technologies International, ACT I, in Arlington. 
ACT I is a DOD and DHS contractor with 273 employees, and a 
renewal option on the DHS contractor occurred during the 
shutdown period. And because procurement officers were not 
deemed essential, the option could not be exercised, and a 
large amount of employees had to be rolled off projects. ACT I 
is currently going through the request for equitable adjustment 
to seek compensation for expenses the company incurred because 
of the shutdown through no fault of its own. We certainly want 
to hear that story.
    Mr. Berteau--and I am going to ask all of our witnesses, we 
have your prepared statements, if you can summarize in five 
minutes, we would appreciate it.
    Oh, wait. I got to swear you in. Where is the swearing in? 
It is the habit of this committee that we swear in all 
witnesses. And let's see, where is the swear? Somebody.
    All right, if you'd rise and raise your right hand.
    Do you swear and affirm that the testimony you are about to 
give is the truth, the whole truth, and nothing but the truth, 
so help you God?
    Let record show the witnesses answered in the affirmative.
    Thank you. Please be seated.
    Mr. Berteau.
    I didn't think you were going to lie anyhow, but----

 STATEMENT OF DAVID J. BERTEAU, PRESIDENT AND CHIEF EXECUTIVE 
             OFFICER, PROFESSIONAL SERVICES COUNCIL

    Mr. Berteau. Thank you, Mr. Chairman, and for both that 
vote of confidence but, most importantly, for the opportunity 
to be here today. And I appreciate the opportunity to add some 
oral remarks.
    As you noted, government civilian employees and the 
contract workers who support them share many common 
characteristics: a passion for public service, a commitment to 
meeting the needs of the American people, a dedication to 
fulfilling the missions and performing the functions for which 
agencies engage them. They also share a common belief that 
government shutdowns are misguided, damaging, and avoidable.
    But the way in which government agencies and contractors 
respond to shutdowns are not the same, and that's why this 
record, I think is so important. For the government, the first 
action is to stop paying their workers, not because they want 
to but because they have to. That's what's a lapse in 
appropriations means. But for the companies, the last thing 
they want to do is to stop paying their workers because they 
will lose them.
    When appropriations lapse, of course, funding disappears. 
And so the first decision is, what's an essential mission or 
function that has to be continued, and what are the workers 
that need to be sent to work without pay in order to continue 
that going? On any worker who's not doing an essential 
function--a misnomer here is that people are essential. It's 
not the people that are essential. It's the mission or the 
function that's essential. It's the workers associated with 
them who have to then work or not work.
    But it's very different for contracts. There's a lot of 
factors that affect whether contract work continues under a 
shutdown. If it's prior obligated funds, for instance, and 
everything else is the same, work continues. In fact, 
contractors are required to continue working under a--that's 
what a contract is. They're required to continue working on the 
contract unless an action occurs or the passage of time, the 
absence of money occurs, so the work has to stop.
    So it's a very, very different dynamic for contractors than 
it is for government employees. Of course, shutdowns can 
further interfere with the work. You may actually have funding, 
a requirement to continue work, but you can't get access to the 
facility, or you can't access the data, or there's no 
government employee there to certify that you've done what 
you're supposed to do so you can move on to the next task. So a 
whole host of things that come into that. Our statement goes 
into that and some of my colleagues are going to go into that 
as well.
    So these differences also affect how contractors not only 
continue to work, but it can lead to confusion. As you--you'll 
see from Mr. Niggel in terms of his option being exercised. It 
can lead to conflicting guidance. It can lead to missed 
opportunities and a lot of other negative consequences. My 
statement goes into key roles there.
    So here's how the shutdown really affected contractors. 
Three ways. No. 1, on the work force, right? Tens of thousands 
of employees lost their work, lost their pay. And unlike 
Federal employees, they had no guarantee that they would even 
have the jobs there at the end of the process much less--much 
less anything like backpay. In addition, it really impacts 
recruitment of new workers because who wants to come to work 
for an employer that says: You may have to work without pay. 
Well, there's plenty enough opportunity to do that in real life 
already. You don't need to do it. It makes it much harder to 
attract new talent at a time when unemployment is at a 50-year 
low, and there are plenty of other options out there for people 
to go pursue. So that's the first impact is on the workers 
themselves.
    The second is financial. So the government, as you noted, 
stopped paying invoices including for work that had been done 
in October, in November, in December, before the shutdown 
occurred, as well as for authorized and funded work that 
continued during the shutdown. So companies exhausted their 
lines of credit. Many of them--I would hear from member CEOs 
who'd say: I'm in a dilemma. I either keep paying my people and 
I go out of business, or I quit paying them, and they quit, and 
then I go out of business. Please give me a third option.
    Then, finally, there's the impact on the government, and 
particularly the lost productivity, the missed work, the 
delays. Program offices even now five months later, four months 
later, are way behind in solicitations. They're way behind in 
accepting contractor labels. They're way behind in making 
decisions, for example, on new contracts.
    Of course, your purpose here today is not to say what a bad 
idea shutdowns are. We're kind of in broad agreement on that, I 
think. Instead, how do we deal with the consequences and also 
how do we reduce the risk of the future shutdowns. We have 
several recommendations, but I put them into three basic 
categories. First, take care of the workers, right? Backpay, as 
we call it, or compensation, as well as allow for untaxed 
donation of leave as Federal employees have as well, right? 
Second, take care of the companies. Communications, contract 
issues have to be addressed before, during, and after a 
shutdown. And, third, take care of the government and the 
American people who are really the ones that suffer from the 
shutdown. And they're not here at the table today, but we think 
we're representing them here.
    How do you do that? A two-year increase in the budget caps, 
full year appropriations on time for Fiscal Year 2020, and 
automatic continuing resolution along the lines of some of the 
legislation that's been proposed.
    So, Mr. Chairman, that concludes my opening remarks. I 
thank you, and I look forward to your questions. And I'll yield 
the rest of my time.
    Mr. Connolly. You are perfect. Thank you, Mr. Berteau.
    Mr. Krone.

   STATEMENT OF ROGER A. KRONE, CHAIRMAN AND CHIEF EXECUTIVE 
                        OFFICER, LEIDOS

    Mr. Krone. Great. Thank you, Chairman Connolly and other 
members of the subcommittee for the opportunity to discuss a 
key concern facing Leidos and the professional services 
industry. And the views I express, of course, today are my own.
    The impact of further government shutdowns, whether total 
or partial, will have serious and long-term impacts on our 
industry's ability to attract and retain the talent to support 
the critical missions of our Federal agency customer. I believe 
it's through productive dialog such as this that we will find 
solutions to the multifaceted challenge that lay before us. As, 
of course, is--I'm not able to fully discuss all of these 
matters in my oral statement. Therefore, I provided a 
comprehensive response in my written testimony. I ask that that 
be included in the report.
    Mr. Connolly. Without objection.
    Mr. Krone. Thank you.
    Leidos is a Fortune 500 company with 32,000 employees, Our 
work in information technology, engineering, and sciences help 
solve some of the toughest challenges we are contending with in 
defense, intelligence, homeland security, civil, and health 
markets.
    Related to the shutdown, we felt the most significant 
impacts within our civil group. This is the group that serves 
agencies, including the Department of Energy, Department of 
Homeland Security, the FAA, and the FBI, among others. We lost 
an estimated $14 million in revenue as a result of these 
disruptions, or about $400,000 per today. We also experienced a 
delay in payments on outstanding invoices totaling about 18 
million. But more importantly, we saw work on 22 important 
programs come to a halt. This included impacts to about 200 of 
our subcontractors of which about one-half are small 
businesses.
    I want my main focus today, however, to be on the people 
side as that is where I believe we saw the most impact. Due to 
the partial government shutdown, 893 of my colleagues either 
had no or limited work to perform due to being on contracts 
associated with closed Federal agencies. We did three things to 
support these folks. We redeployed them to open positions 
whenever possible. We allowed them to advance paid time off 
hours up to a balance of negative 80 hours. And we offered 
hardship assistance through our relief foundation.
    To aid in the redeployment, we stood up a team to match 
affected employees to other jobs within the companies. This 
team worked nights and weekends throughout the shutdown. To 
help those experience financial hardship, we launched a special 
initiative within our relief foundation to enable employed 
employees to donate money or their paid time off to help these 
individuals. I filled out a donation form myself maxing out a 
donation of my paid time off, two weeks of vacation.
    During the time of hardship, we received more than 50 
requests from the employees for assistance stating that they 
were in a state of, quote, ``extreme financial hardship,'' 
close quote. Each of these individuals was given a $2,500 
grant. If the shutdown were to have continued any longer, we 
anticipated receiving another hundred requests each week for 
assistance. With a lot of maneuvering and extra effort, we were 
able to put some workarounds in place for our people.
    I assure you, though, individuals and families suffered 
losses during these shutdowns. Vacations were canceled. 
Birthdays were missed. Holidays were used just to get one more 
day of pay. Employees with no other options sank deeper and 
deeper into a negative leave status. Some even used their sick 
leave to bridge the gap in desperation. These folks are getting 
paid now, but they will be recovering this negative leave for a 
very long time.
    We all need to collectively look for ways to eliminate 
government shutdowns. We should harness the pain of this most 
recent event and learn from it, working together to enact a 
permanent solution. First, we must change the process and the 
rules by which we create Federal authorizations and 
appropriations. Many ideas have been proposed. The automatic CR 
solution, biennial appropriations, designating more government 
functions and personnel as essential. In general, we should 
enact legislation that prohibits a potential shutdown from 
being used as a leverage on the budgeting process.
    Second, I ask that, in the event that future shutdowns 
cannot be prevented, you see the contractor work force, these 
men and women who stand shoulder to shoulder with their 
government colleagues as essential to the operation of our 
national government. I ask that we work together to find a way 
to enact legislation that will recognize the importance of 
their contributions on this critical national resource--and the 
human impact of a shutdown on this critical natural resource 
and treat them just as their Federal work force counterparts 
are treated. That means parity in the restoration of pay and 
mitigation of other impacts on benefits, such as leave.
    I'd like to thank Chairman Connolly for his leadership on 
this issue including cosponsoring a number of bills and for 
holding this hearing.
    With that, I close my remarks, Chairman Connolly, and other 
members of the subcommittee. And I thank you for this 
opportunity to testify today. And I look forward to your 
questions.
    Mr. Connolly. Thank you, Mr. Krone.
    Mr. Grabowski.

 STATEMENT OF ED GRABOWSKI, PRESIDENT, LL 2061, DISTRICT 166, 
                             IAMAW

    Mr. Grabowski. Chairman Connolly and members of the 
committee, thank you for the opportunity to testify today. I am 
the president of Local Lodge 2061 of the International 
Association of Machinists and Aerospace Workers. Local Lodge 
2061, a machinist union, is based in Cape Canaveral, Florida, 
and represents around 700 members that are employed on several 
different Federal contracts supporting the U.S. space program 
at both the Kennedy Space Center and Cape Canaveral Air Force 
station.
    The members of our local perform a wide variety of jobs 
including helicopter pilot, laboratory technician, propellant 
mechanic, machinist, industrial electrician, and crane 
operator. These jobs ensure the successful and efficient 
completion of vital government operations carried out by 
Federal contractors. Many aspects of this work are hazardous, 
and the tasks associated with them must be handled with utmost 
professionalism to guarantee the safety of personnel and the 
vehicles they support.
    A large percentage of our members, including myself, are 
proud veterans of the Armed Forces. It is partly because of 
this service and a security clearance associated with it that 
afforded us the opportunity to work supporting the Nation's 
space program. I have devoted over 28 years working alongside 
our members, and I can personally attest to these individuals' 
passionate and conscientious focus when it comes to their work. 
We are a diverse group of people in age, ethnicity, religion, 
and sexuality.
    We recently had to endure three shutdowns within a 12-month 
period. The first two shutdowns lasted only 1 day but still 
caused many members to lose pay. All have been stressful. But 
the last shutdown, which totaled 35 days, created enormous 
problems for our members and the local community as a whole. 
Though we Federal contract employees work side by side with our 
civil service counterparts, there was no guarantee of backpay 
for us. We were fortunate that all of our government contractor 
employers kept our medical insurance enforced through the 
shutdown. However, the members had to meet their portion of 
medical insurance premiums for their coverage to remain 
current. This was often accomplished by using personal leave 
time or by writing personal checks to the employers. We had 
many members and their dependents that suffer from serious 
medical concerns. So, in addition to the premium costs, these 
individuals also had to pay for deductibles, out-of-pocket 
copayments, and expensive pharmaceuticals.
    The fact is the government may shut done, but life's 
challenges remain ongoing. Without a guaranteed income for 35 
days, our members still had to meet all their financial 
obligations. Some had to take out short-term loans in order to 
make ends meet. In some cases, the only hope they have of 
repaying these loans without a financial penalty is to receive 
backpay for wages lost during a shutdown.
    Some of our members have received backpay payments, but 
many members still have not received any backpay to their lost 
wages. For many, this has resulted in an eight-percent loss of 
annual income for them. For those who did receive backpay, it 
did not come in full until the end of March.
    It is hard to convey the anxiety we all experienced in 
these shutdowns. The financial effects for some are lasting and 
damaging. Earlier I mentioned that the security clearances many 
of us hold provide a gateway to our employment. When 
individuals that hold sensitive clearances experience a 
financial difficulty, it can place their clearances in peril. 
And a loss of a clearance can result in their loss of 
employment.
    My testimony provides insight on the impact the shutdowns 
of just one union local in our country. There were thousands of 
Federal contract employees represented by the IAM that were 
impacted by this last shutdown. We must remember that the 
financial loss experienced by these workers due to the shutdown 
ripples through the communities they live in. The goods and 
services normally purchased by these workers will not be sold, 
not to mention the deep financial impacts to these workers on 
their retirement investment, education funding, and general 
savings for emergencies.
    It is time to provide some financial insurance to the 
hardworking, dedicated Federal contractor employees.
    The first step can be achieved by supporting and passing 
legislation, such as the Fairness for Federal Contractors Act, 
H.R. 824, which ensures backpay for all Federal contract 
employees impacted by the recent 35 shutdown. I encourage all 
to support this legislative effort.
    Chairman Connolly, other members of the committee, I again 
thank you for the opportunity to testify today, and I look 
forward to your questions.
    Mr. Connolly. Thank you, Mr. Grabowski.
    Ms. Aleman.

STATEMENT OF ALBA M. ALEMAN, CHIEF EXECUTIVE OFFICER, CITIZANT, 
                              INC

    Ms. Aleman. Good morning, Chairman Connolly and members of 
the House Committee on Oversight and Reform. Thank you for the 
opportunity to speak to you about the impact of the shutdown on 
our business and the contracting community that I support.
    My name is Alba Aleman, and I'm the founder and CEO of 
Citizant. It's a small business serving the Federal Government 
for the last 20 years based in Chantilly, Virginia. We employ 
180 professionals supporting Federal agencies in 26 states. We 
have been in business since 1999 and have weathered many 
storms: Y2K, 9/11, numerous government shutdowns, continuing 
resolutions, and the Budget Control Act of 2011.
    Throughout all this, we continued to serve the IRS, the 
Department of Defense, the Department of Homeland Security, and 
the Department of Justice, the immigration courts. Our services 
have supported agencies in improving efficiencies and 
effectiveness, allowing them to save or repurpose untold 
millions of taxpayer dollars.
    The purpose today is to share some of the impact of this. I 
do have a longer form in my testimony, and I ask that you 
please accept it for the record.
    Mr. Connolly. Absolutely. Without objection.
    Ms. Aleman. Thank you, sir.
    In late December, six of the Federal programs that we serve 
were immediately halted. This affected 35 Citizant employees, 
cut $430,000 of revenue, forced a $200,000 loss in 
profitability, and cost us more than $15,000 in interest, 
expenses due to increased line of credit borrowings.
    Based on numerous prior experiences with shutdowns, we 
immediately implemented a companywide leave donation program 
and collected 2,470 hours of leave from employees working on 
programs that were still operating and who had benefited from 
these leave donations during the prior shutdown of 2013. We 
redistributed these hours to keep our entire work force; 100 
percent of our work force was paid throughout the entire 
government shutdown. And they never feared--they heard from me 
daily and never feared that they would not get their pay, even 
as the shutdown dragged on.
    However, the official end to the shutdown did not end the 
worry or the crisis for Citizant and other contractors. Because 
the government had furloughed those responsible for approving 
and paying invoices, we did not receive payment for services 
rendered throughout the shutdown and, in some cases, for work 
performed back in October 2018. Government payments stopped 
even for projects that were not shut down, but we were 
contractually required to continue to work.
    Citizants' unpaid invoices continued to pile up well into 
March 2019, putting us more than $4 million in debt. We maxed 
out our borrowing capacity and had to postpone paying all of 
our own vendors, including the IRS, until early April.
    We continued to assess cash-flow and finances daily for 
months after the shutdown was over because we were gravely 
concerned about how we would cover our $750,000 payroll every 
two weeks due to the government's delayed processing of 
payments.
    When your only customer doesn't pay you for nearly four 
months and you've reached your company's borrowing capacity, 
you face the dire prospect, as a business owner, to file for 
bankruptcy or to sell off parts of your business for pennies on 
the dollar in order to pay your employees. We were within days 
of having to have made that decision.
    In conclusion, I'd like to offer three possible actions 
that we would appreciate your support on in terms of 
legislative reform. First and foremost is to preserve our work 
force. Congress could pass legislation that would guarantee 
backpay to contractors, most of whom are essential to the 
proper functioning of Federal agencies. Many of our employees 
have security clearances and specialized knowledge that are 
difficult to replace. Guaranteed backpay would reduce their 
anxiety and make them more likely to stay in this industry. In 
addition, our banks would be more willing to extend credit to 
cover payroll and payments to our vendors if they knew some 
type of financial adjustment was forthcoming.
    Second, to mitigate the cashflow crisis faced by 
contractors, Congress could mandate that processing and paying 
invoices are essential activities that must continue during any 
future shutdown. This financial function is essential to our 
Nation's economic security as well as the viability of small 
businesses and the lives of millions of government contractor 
employees.
    Finally, and most importantly, craft legislation that makes 
a shutdown the tool of last resort. Citizens elect you to 
represent them to negotiate on their behalf and to make 
compromises. Shutdowns have become weapons of failed 
negotiations and have eroded our political system. They risk 
the welfare and lives of millions of Americans. We require 
civil discourse, collaboration, and compromise from our elected 
officials in order to reach agreement on important legislative 
and budgetary matters. Please put an end to this abuse of power 
and trust.
    I'm grateful for this opportunity. I'm passionate and 
deeply to committed to serve. And I look forward to your 
questions. Thank you so much for your time.
    Mr. Connolly. Thank you, Ms. Aleman.
    Mr. Niggel.

   STATEMENT OF MICHAEL A. NIGGEL, CHIEF EXECUTIVE OFFICER, 
        ADVANCED CONCEPTS AND TECHNOLOGIES INTERNATIONAL

    Mr. Niggel. Chairman Connolly, members of the subcommittee.
    Mr. Connolly. Am I pronouncing your name correctly?
    Mr. Niggel. Niggel, yes, sir.
    Mr. Connolly. Niggel. Excuse me.
    Mr. Niggel. Thank you for the invitation to testify on 
behalf of Advanced Concepts and Technologies International, 
known as ACT I. My name is Michael Niggel, and I am the CEO 
headquartered here in Arlington.
    ACT I delivers total acquisition management solutions to 
the U.S. Government and allied governments. Our staff provide 
trusted technical and management advice on complex programs and 
systems. We have over 200 experts in four domains: defense, 
homeland security, space and intel, and international programs. 
We work in functional areas like requirements, acquisition, 
program and financial management, engineering logistics, and 
cybersecurity. Most of our staff live and work in Fairfax, 
Arlington, and surrounding counties.
    First, I'll summarize actions that Congress can take, and 
then I'll describe problems we faced during the shutdown. To 
protect government employees and small businesses, Congress 
could give definitive guidance to swiftly pay requests for 
equitable adjustments, guaranteed compensation for contractors 
during budget shutdowns, enact timely budget bills. And if CRs 
are needed, make them automatic. And, finally, increase the BCA 
caps for two years, fiscal years 2020 and 2021.
    Now I'll address the impacts that shutdown had on ACT I. It 
affected two of our DHS contracts. The first was our largest 
contract supporting the Enterprise Program Management Office, 
called EPMO, where we provide program support across seven 
programs, including cargo and passenger systems, tactical 
communications, enterprise engineering, and enterprise 
networks. We won this 45-person LPTA contract in January 2018. 
Also affected was our contract with the Civil Rights and Civil 
Liberties Office where we have nine technical and admin 
staffing working on a firm fixed price LPTA contract.
    Here are the positive impacts of the shutdown, and they 
were driven by ACT I and DHS. ACT I's number corporate goal is 
employee satisfaction. We made a strategic decision to pay our 
DHS support staff during the shutdown. We brought the team to 
headquarters for training and team building. This decision 
increased employee satisfaction and corporate loyalty, allowed 
us to retain our highly cleared technical staff, and mainly 
provided steady income and benefits for our employees and 
families.
    Our decision to fund all salaries and benefits protected 
our employees, their clearances, and DHS. The result was we 
built both employee and DHS loyalty and respect. This was a big 
investment for a small business like ours with a very high and 
continuing risk that we may never be fully or even partially 
reimbursed.
    Now, the not-so-good news. We knew we'd lose sales, 
experience slow payments, and possibly lose top talent, 
especially our staff with high-level clearances. Commercial 
firms target our top cyber, comm, and intel talent, exploiting 
government salary caps and unpaid shutdowns to entice our 
talent.
    So, early on, we talked with our bank, First Virginia 
Community Bank, and together analyzed that we could go four to 
six weeks on our line of credit. We're lucky. Most small 
businesses are less than a million dollars in sales. They may 
only support one agency. And with a shutdown, they may have to 
lay off folks or close.
    Here are the direct DHS shutdown impacts on ACT I. We lost 
sales over 500K. We had a million dollars of delayed cashflow 
from 2018 payments unable to be processed while the government 
was closed. We submitted two REAs to DHS in February 2019 for 
about $500,000. We're dealing with different legal 
interpretations from two offices in the same agency. One office 
says it doesn't agree that it must pay based on legal counsel's 
interpretation of the FAR. The other office is evaluating our 
request.
    We would like these REAs approved to recover shutdown 
losses. Ninety-five percent of the negative impact to ACT I 
could have been easily avoided if the government had a 
contracting officer available to execute our contract option 
any time during the shutdown.
    Finally, to reiterate our recommendations to Congress for 
action, please provide uniform clear guidance to agencies and 
contracting officers to swiftly approve REAs. Please give 
agencies authority to guarantee compensation for contractors 
performing during budget lapses and shutdowns. Please enact 
appropriation bills on time and for the full fiscal year; or if 
a CR is needed, then ensure it's an automatic CR. Please 
provide a two-year increase in the BCA caps for fiscal years 
2020 and 2021.
    Thank you for inviting ACT I to share our story which can 
be echoed by many other small businesses. And given that 
there's another panel after us, I request unanimous consent to 
revise and extend my testimony.
    Mr. Connolly. Thank you so much, all of you.
    We're going to have a round of questions, and each member 
will have five minutes with which to ask questions.
    Mr. Niggel, let me just pick up on your testimony.
    If there had been authority to suspend the expiration of a 
contract pending the reopening of the government, you would 
have been kept whole, or without prejudice, with respect to 
reauthorizing that contract you lost. Is that correct?
    Mr. Niggel. Yes, sir. We were in an option here situation 
that was due on January 15. The shutdown started December 22. 
Between the 22nd and the 25th, when the government reopened, 
there was no contracting officer available in our enterprise. 
There might have been one at the top of DHS who probably had 
thousands of these situations to deal with. So they weren't 
able to execute our option, so we basically were off contract 
and could not show up in the offices.
    And our customer was frustrated with us, because we weren't 
there and other contractors were, because they had funded 
contracts, and we did not. So it was until the government 
reopened, and we could go explain to them that we were off 
contract; we were not legally allowed to be there. And then 
they understood better what our situation was.
    Mr. Connolly. But you were caught in kind of a catch-22 
situation?
    Mr. Niggel. Yes, sir.
    Mr. Connolly. I think that's important. As we look at 
things we can do, certainly one of them is to have some kind of 
provision in law that says during a shutdown, the expiration is 
on ice, so that you don't lose a contract simply because 
contract officers aren't there.
    Mr. Niggel. Or an option automatically extended without 
written permission.
    Mr. Connolly. Right. I think we have to look at that, Mr. 
Berteau.
    Let me just say, both, Mr. Berteau, Mr. Krone, and you, Mr. 
Niggel, talked about automatic CRs. And I like your reaction, 
but I--we think that's good public policy. But on the other 
hand, it almost invites some people, politically, to seize on 
that and say, Good, that's how we're going to fund the 
government. And so, yes, we avoid shutdowns, but we also never 
get to a substantial budget that looks at the merits of the 
case. We stay at a low funding level as the, sort of, permanent 
solution that some people will seize on.
    And politically, I think certainly all of us here at this 
table would have that concern. In an ideal world, that wouldn't 
be a problem, but we live in anything but an ideal world where 
we work.
    Your reaction?
    Mr. Berteau. Mr. Chairman, you are a good student of 
history. There are a number of times where the scenario that 
you've proposed would have been desired by a majority of the 
U.S. Congress. You know, at PSC, we actually decry continuing 
resolutions as a very, very bad way of governing. About the 
only thing worse is a shutdown, right? And so the idea that an 
automatic continuing resolution would prevent a shutdown is a 
very appealing idea. Clearly, a far better approach is, in 
fact, to use regular order and fully fund government 
requirements through appropriations, as the Congress actually 
sort of did this past year for five of the 12 appropriations 
bills.
    I think, though, that the leverage--so what you really 
propose is kind of two things: One is, is it a good idea to 
provide an automatic CR as opposed to a shutdown? Generally 
speaking, yes. The second, more complicated question is, how do 
you execute that so that it doesn't create negative incentives 
and actuate create an opportunity to have an ongoing CR all the 
time? And I think that that's a flaw in all of the existing 
legislation so far, and it needs to be corrected before 
Congress would finally act.
    The third would be what do you do in the event a 
Presidential veto? Obviously, you are going to have to support 
to override this. And, you know, we've actually had shutdowns 
that were created through a veto of a continuing resolution; 
1995 being a case in point in that regard. So all three of 
those I think, have to come into play in your conversation 
there.
    Mr. Connolly. Mr. Krone, did you want to comment on that 
or----
    Mr. Krone. No. I think, given the choice of a--of a CR or a 
shutdown, we'd would rather see the CR.
    Mr. Connolly. Sure.
    Mr. Krone. But we do understand the negative ramifications 
that you could end up in a perpetual CR and we actually never 
get authorizations or an appropriations bill done. But if I had 
to choose one or the other, I would rather have the CR.
    Mr. Connolly. And Mr. Berteau made a really good point 
about recruitment. We now have the lowest unemployment rate 
we've had since 1969. Here, it's even lower. I don't know--it's 
about 2 percent? And that means it's a very tight labor market, 
especially for skilled labor. And I would think it affects 
everybody from a big company like yours, Mr. Krone, to a 
midsize business like yours and yours, Mr. Niggel, and Ms. 
Aleman.
    Recruitment--after the shutdown, did recruitment become a 
problem for you?
    Ms. Aleman. Yes, absolutely. But not just for us serving 
the government, but several key, highly technical leaders from 
the Department of Homeland Security left in the middle of the 
shutdown to go back to industry. I think it's--I did an article 
for Forbes during the shutdown and looking at the statistics of 
how long it's taking us to bring great talent into the 
government marketplace, both government employees as well as 
contracting, and it's going to take years to recover from--from 
that, and you are not going to be able to draw that top talent 
into our marketplace. So it's a real concern in terms of 
technology and innovation and modernization, which is so 
critically needed.
    Mr. Berteau. We had a number of stories from our member 
companies of recruits who were actually canceling interviews 
during the shutdown. Why bother? You know, I'm not going to go 
to work for you, so I'm not even going to waste my time. And 
you can't ever make that back up. You can't ever make that back 
up.
    Mr. Krone. Mr. Chairman, we have seen more commercial 
companies come to the national capital region because of the 
large concentration of computer science majors and highly 
educated work force.
    We compete with them every day for our work force. And they 
can now say we can offer you a job that is immune to the 
vagaries of the government funding and budgeting cycle. And 
that becomes an advantage for them, and we go head to head 
against those companies to recruit the employees who then 
perform the work for the Federal Government.
    Mr. Connolly. Mr. Grabowski, I assume you maybe experienced 
the same thing?
    Mr. Grabowski. Mr. Chairman, as far as people departing the 
contract after a shutdown--as a matter of fact, we've had crane 
operators. That skill is needed in the private industry, in 
construction. And it's a very critical skill on at Space Center 
for lifting flight hardware. And that's hazardous, and if they 
don't do it right, you possibly impact the mission. So we have 
lost--like that was one of the jobs, I remember, in January, we 
had an individual, they left, they did not come back.
    Mr. Connolly. Thank you. My time is up.
    Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman.
    You represent, for the most part, skilled workers. The 
chairman mentioned we're trying to see what can be done. I have 
a bill that would allow some backpay for workers who work in--
who are contract workers in retail, food, custodial and 
security.
    I'm wondering whether any of your work force would be 
included and what you think of a bill of that kind in a 
Congress of this kind, which is unlikely at this time, at 
least, to take care of all workers. I would like to hear what 
all you have to say about that bill.
    Mr. Berteau. Congresswoman Norton, let me go first. We have 
quite a number of member companies who have employees exactly 
as you have described, as part of their work force, or who 
employ subcontractors who also have such workers and so the 
prime contractors--and it's not only in Washington, DC.; it's 
across America, as you well know. So we applaud the support and 
the focus of that--of the problem for those that you have 
brought to bear on there.
    I think it's difficult to figure out exactly where you draw 
the line for those workers, you know----
    Ms. Norton. If I could say, I'm also cosponsoring a bill 
that makes it 200 percent of pay. Mine actually lays out who 
the workers are----
    Mr. Berteau. Right.
    Ms. Norton [continuing]. because we figure that's who they 
are.
    Mr. Berteau. Right. And so as a matter of political 
practicality, there may be a need to do that. But, you know, 
for the Federal workers, we don't draw any such line. If you 
are on the Federal payroll, regardless of whether--I don't 
think we have any GS-1s anymore. There were GS-1s when I first 
came into the government. But all the way up to the super 
grades. All of the Federal employees are covered by that, and 
we would seek to have that same coverage extended to all the 
contract workers.
    Ms. Norton. Well, of course, you are entitled to that, just 
as all workers are, all Federal workers are covered.
    Let me ask about unemployment insurance, whether or not any 
of your employees applied.
    We understand there was some--some concern that some had--
had some--had some opportunities, others didn't.
    Does the unemployment insurance program need to be attuned 
to contract workers who, by the way, are a larger number of 
workers than Federal workers now.
    Could I hear how unemployment insurance--Mr. Grabowski, why 
don't you start.
    Mr. Grabowski. Yes, Congresswoman. As far as my experience 
with it, most of our members were too confused, like, were they 
eligible for it, because they were furloughed, they actually 
did not receive a layoff notice. So they weren't astute enough 
to how do I apply, and if I don't take personal leave time, am 
I still entitled to collect unemployment compensation?
    So how--the suddenness and it was over the holidays, and we 
had a problem with communication. So I would--I don't know of 
anyone that filed for unemployment compensation because it was 
too complex and they didn't know if they were still entitled to 
it because I used my personal leave time. Some, like we said, 
they exhausted all of their personal leave time in order so 
they would have a paycheck.
    Ms. Norton. Any of you have similar experiences?
    Mr. Berteau. We surveyed our member companies about the 
third week into the process about this, and what we found were 
three key things that are noteworthy here.
    One, of course, is each state sets its own rules when it 
comes to unemployment eligibility and to the process for both 
applying for and verifying eligibility for unemployment 
insurance. And workers from the same office and the same 
company in this area, for example, would have three or four 
different jurisdictions that they would be eligible to apply 
for: Maryland, Virginia, the District of Columbia, West 
Virginia and Delaware. And the rules are very, very different.
    In addition, the question of how do you verify and validate 
that eligibility? What kind of document do you need to have in 
hand from your company----
    Ms. Norton. Are you saying this would have to be done at 
the state level? There's nothing that could be done to clarify 
this--the layoff took place at the Federal level.
    Mr. Berteau. I think there are----
    Ms. Norton. Is there any legislation we could put in that 
would clarify what the state should be doing at such a time?
    Mr. Berteau. There are Federal standards that exist today 
and, of course, allow for the Federal reimbursement of those 
unemployment benefits up to certain loads, and you could change 
the requirements associated with those Federal standards.
    Ms. Norton. Mr. Chairman, under things that we might 
consider, this confusion, at least, it seems to me we could 
help eliminate.
    If I could just ask one more question.
    Mr. Connolly. Sure.
    Ms. Norton. Mr. Krone, you indicated that some of your 
employees were redeployed to other contracts. I wish you'd 
clarify how that might--how that occurred and whether it, in 
fact, was helpful to people who were laid off.
    Mr. Krone. Yes. Well----
    Ms. Norton. And where were those--how come those contracts 
were okay to continue?
    Mr. Krone. Thank you for that question, Congresswoman.
    The Department of Defense was funded during the shutdown. 
And at Leidos, we have a relative balance across the Federal 
agencies. And because, frankly, of the shortage of computer 
science majors and engineers, we had open jobs on contracts 
with the Department of Defense that needed the skills of the 
furloughed workers, the workers who were taking paid time off 
in the Department of Homeland Security, you know, FBI and DOE.
    And so, we created, in our H.R. department, a reallocation 
or redeployment process where we inventoried the skills of the 
people who were furloughed, and then matched them with open job 
requisitions in some of our Department of Defense contracts and 
were able to move them over to those contracts so they could 
continue to work on programs.
    Ms. Norton. This is a very important point. We're different 
agencies here, and I wonder if any of the rest of you used this 
redeployment?
    Ms. Aleman. We attempted to. But the clearances that we 
hold at the IRS take about six months to a year to get a 
laptop, and the clearances at the Department of Justice take 
about six months, three to six months, and at Homeland 
Security, depending on whether it's ICE, DHS headquarters, or 
S&T, could take anywhere from 60 to 180 days. So there was no 
way we could move someone from one agency to another. It was 
not possible.
    Mr. Berteau. I would note also, Congresswoman Norton, that 
in a number of the shuttered agencies, the personnel were 
required to approve such a transfer were furloughed, and they 
were not available to approve such a transfer.
    Ms. Norton. Mr. Krone, how were you able to do this?
    Mr. Berteau. He was doing it with agencies that weren't 
shut down.
    Ms. Norton. I see. And you-all--you couldn't even do it 
with agencies that weren't shut down.
    Ms. Aleman. No.
    Ms. Norton. I applaud your creativity.
    Mr. Krone. Well, thank you.
    Ms. Norton. Thank you, Mr. Chairman.
    Mr. Connolly. Thank you, Ms. Norton.
    And following up on Ms. Norton's suggestion, I just commend 
you, Mr. Berteau, representing 400 companies--and others 
obviously could participate--it might be useful to think about 
preparing a set of recommendations that's fairly comprehensive. 
We're capturing some of them, as Ms. Norton just indicated. But 
I think we have an opportunity here to be fairly comprehensive 
and systematic. And here's what has to be addressed: From 
unemployment insurance at the Federal level, what we can do, to 
the guarantee of backpay and lots of other issues as well.
    Mr. Berteau. We will undertake, too, sir, Mr. Chairman.
    Mr. Connolly. And part of the problem we've got in a 
private sector is each contract stands on its own.
    So, Mr. Krone, how many contracts does Leidos manage with 
the Federal Government at any given time?
    Mr. Krone. Oh, maybe 10,000.
    Mr. Connolly. Ten-thousand?
    Mr. Krone. Yes.
    Mr. Connolly. And each one has its own provisions?
    Mr. Krone. Its own provisions, its own terms and 
conditions, its own contracting officer, its own program work 
state, yes.
    Mr. Connolly. And that's what complicates things.
    Mr. Krone. Right.
    Mr. Connolly. Thank you.
    We're joined by our good friend who dared the cross the 
river from Maryland, Jamie Raskin.
    Jamie--thank you so much, Mr. Raskin, for joining us here 
today.
    Mr. Raskin. Mr. Chairman, thank you very much.
    So, yes, it did take me a few minutes extra to arrive, 
crossing the Potomac.
    Ms. Norton. He swam.
    Mr. Connolly. I'm going to call on Mr. Beyer, and you can 
catch your breath. We're so glad to have you here today.
    Mr. Beyer.
    Mr. Beyer. Thank you, Chairman Connolly, and again, thanks 
all of you for coming.
    You know, you read again and again, the No. 1 reason why 
security clearances are denied is because of financial 
hardship. And so I sent a letter, joined by most of our folks 
here, back in January, urging the administration to prohibit 
agencies from penalizing security clearance for shutdown-
induced poor credit.
    One of the things is we don't even know how many security 
clearance applicants are actually affected. And Mr. Grabowski, 
you mentioned specifically the security clearance with your 
folks in Florida.
    Are there specific examples in cases, or is this more the--
the existential threat to their livelihood?
    Mr. Grabowski. It's more of a--Congressman, more of a long-
term threat. Because how do you identify it? You know, if you 
did not get 8 percent of that pay, the financial hardship 
continues on much later, months later, even a year later, 
because you have not made the payments of a car payment that 
you thought I would catch up on, maybe work some overtime.
    So as of yet, no one has come to me and said, Hey, I'm in 
financial ruin and I might lose a clearance. I think it's as we 
move forward and we never get the backpay, that's when it will 
happen.
    Mr. Beyer. Thank you.
    Mr. Berteau. Mr. Beyer, could I add one thing for----
    Mr. Beyer. Yes, Mr. Berteau.
    Mr. Berteau. So that's backward looking in terms of the way 
the clearances have been done. But as you know, the President, 
just on the 23d of April, signed an executive order--24th of 
April, signed an executive order transferring background 
investigations from OPM, the National Background Investigations 
Bureau, to the Department of Defense. And that is supposed to 
take effect by the end of this fiscal year, September 30.
    What DOD has been doing is----
    Mr. Connolly. But, Mr. Berteau, let me just interject, 
Congress will have some say over this.
    Mr. Berteau. I do understand that, sir. I understand that.
    Mr. Connolly. They have yet to come before--my subcommittee 
has jurisdiction. They have yet to come before us with a single 
shred of paper justifying any of this.
    Mr. Berteau. I'm aware of that, and I stand in awe of your 
reminding me of that. Nonetheless, for the portion that the 
Defense Department does have responsibility for, what they are 
implementing is a process of continuous evaluation.
    So unlike the process that Mr. Grabowski described, where 
when you come up for your periodic reinvestigation, your 
financial records might be a part of it, now it will be on the 
instant case that you are late, it can pop up. And we're still 
developing this process, so I think it bears watching as you 
continue, regardless of what actions the committee or the 
Congress may take on the overall question.
    Mr. Beyer. Thank you.
    Ms. Aleman, I want to thank you for clarifying one thing 
that I had not really realized, which is that not only were 
people not getting paid for work not being done at the time of 
the shutdown, but invoices for work that had been done earlier.
    So you suggested that Congress actually mandate that paying 
duly earned invoices, bills, et cetera, be classified as 
essential, and therefore be paid.
    Ms. Aleman. Payment, process of invoices. As Mr. Niggel 
also referenced, approving invoices, extending options. All of 
those things are being done by contracting officer 
representatives, which were furloughed, contracting officers, 
which were furloughed, and then the folks inside the payroll.
    So there's folks on the programmatic side and folks inside 
the acquisition organization, or the processing payroll part of 
the organization. So it's all connected. And if any one member 
of that process is removed, the whole thing falls apart.
    And, of course, when they're getting back to work, they're 
overwhelmed. And that's why it took 60 days for us to start to 
receive pay.
    Mr. Berteau. And they had already spent the money. I mean, 
they had paid the employees, right? They were out of that cash.
    OMB--three days before the shutdown ended, OMB circulated a 
revised guidance. So OMB's rules had always been you cannot 
call employees back off of furlough and put them in unpaid 
status to process invoices. That was a rule. You couldn't do 
it.
    With three days left before the shutdown ended, OMB 
circulated revised guidance that said it's okay to do it, but 
not required. We think you should make it mandatory, unless 
there's an exception, because the companies are out of the 
money, they paid their employees, they're going into debt to do 
it, they've done the work, the government should pay up.
    Mr. Beyer. Very good. Thank you.
    And, Mr. Berteau, I just want to thank you for pointing out 
the larger picture, as you talk about the competition for 
employees and the like. But the advent of Amazon, Nestle, 
Gerber, all of the high-tech that's coming, the huge expansions 
of George Mason and Virginia Tech into that space, that the 
competition is only going to get much more severe.
    Thank you, Mr. Chairman. I yield back.
    Mr. Connolly. Thank you, Mr. Beyer.
    Ms. Wexton.
    Ms. Wexton. Thank you, Mr. Chairman.
    I want to take a moment to talk about some of the 
provisions in these contracts and how your relationship with 
the Federal Government, and then below that, with 
subcontractors that you work with and what the consistency is 
in terms of contract provisions.
    Ms. Aleman, you pointed out that during the course of this 
shutdown, you were still contractually obligated to perform 
your functions under the contract. Is that correct?
    Ms. Aleman. That's correct.
    Ms. Wexton. Okay. So how--how were you able to do that? Or 
what challenges did you face in trying to make that happen?
    Ms. Aleman. So the IRS is a good example. Part of those 
contracts were shut down; part of them were not. And we were in 
the middle of filing season launch. I believe the date of 
filing season launch was January 22d. And part of the work we 
do is validate the integrity of the launch.
    And so in the middle of some of the largest tax reform 
legislation that was being implemented in the systems at the 
time, we were unable to validate the integrity of those. And we 
even offered to come in and do it for free, because our folks 
had been doing it for so long, and we knew they were stressed 
and their own staff couldn't come in, but we were unable to do 
so.
    But--and I'm sorry--your question?
    Ms. Wexton. So would that then impact your ability to 
continue--like how--your performance on that contract would be 
evaluated----
    Ms. Aleman. So----
    Ms. Wexton [continuing]. for future bidding?
    Ms. Aleman [continuing]. I did mentor a number of business 
owners that were concerned about their performance overall. In 
our case, our customers were equally feeling the pain of it on 
their side with their staff. And they were not of the opinion 
or mindset that they should do anything to further damage what 
we were trying to do.
    So in our particular case, we had close working 
relationships. They did everything possible to move our 
payments and move everything along as quickly as possible. They 
advocated on our behalf. They did everything possible.
    I was working at DHS at the time, and I was onsite. I 
showed up on Monday after the shutdown, and they had all just 
received their paychecks and they were hustling to try to get 
our invoices processed and everything moved quickly.
    So from our case, we did not experience that. But I can 
certainly see if there's any kind of a lack of communication 
with a government representative, that they may not be as 
willing to advocate on your behalf. And we've had that happen 
before.
    Ms. Wexton. I don't know if anybody on the panel can answer 
this. But is it at all customary to include provisions in 
contracts that provide that in the case of a government 
shutdown, that the contractor will continue to be paid some 
minimal amount, or what the base amount is, or is it if you 
don't work, you don't get paid?
    Ms. Aleman. We sign the contracts; we don't write them. So, 
no, unless they are----
    Ms. Wexton. Contracts of----
    Ms. Aleman [continuing]. unless there's a clause that they 
can leverage in putting into contracts and flow those contracts 
from the FAR--if we can flow them down from the FAR, that would 
be--that would be an avenue to pursue. But we cannot recommend 
clauses in government contracts.
    Mr. Krone. Congresswoman, it is not customary that a 
government shutdown is considered in the terms and conditions 
of the contract.
    Ms. Wexton. And is there something like a stop-work clause 
that is included in all of the government contracts that say 
that if you are ordered to stop work on a contract, you have to 
do it?
    Mr. Krone. Oh, absolutely.
    Mr. Berteau. There is. And I would note that it is much 
easier and faster to issue a stop-work order than it is to 
issue an order to start work again.
    We proposed--at PSC, we wrote a letter to the Office of 
Management and Budget last October, taking lessons learned from 
prior government shutdowns of a number of activities that they 
could undertake to put into guidance to contracting shops 
around the government.
    One was, in fact, to cover exactly that sort of thing. 
We're going to redouble those, taking lessons learned from this 
shutdown, and provide OMB with another activity.
    You could, for instance, put a clause in that says if a 
stop-work order is issued as a result of a lapse in 
appropriations, upon restoration of those appropriations, other 
things being equal, work is authorized to start again without 
further action by the government. That alone would save days or 
weeks in terms of that.
    I know, Mike, you ran into that and you probably did----
    Mr. Niggel. On our DHS contract, we were not issued a stop-
work order, and that's why we have a request for equitable 
adjustment in review right now.
    And going back to your question----
    Mr. Berteau. But you should have been issued one, had they 
been doing it correctly?
    Mr. Niggel. They had the option.
    Mr. Berteau. They had the option.
    Mr. Krone. It was just inconsistent. I mean, agency by 
agency, they were ill-prepared for the shutdown, and each one--
there wasn't uniform direction across all of the agencies.
    Mr. Connolly. I think that's really an important point. On 
top of the multiplicity of contracts, each of which has----
    Mr. Krone. Right.
    Mr. Connolly [continuing]. unique features, we don't have 
any standardized policy across agencies, even divisions that 
are managing contracts, when it comes to something like this.
    Mr. Berteau. So--go ahead.
    Ms. Aleman. But to that point--because I think you were 
about to make that point, you were not issued a stop-work 
order. The head of procurement at DHS specifically sent a memo 
to all COs and CORs saying unless you issue, or your contractor 
is issued a stop-work order, you can--as long as you don't need 
guidance from government to keep doing your job, leave it 
alone, walk away, let them keep doing their jobs.
    The problem is, they sent the notice the day after the 
shutdown, and they were no longer to--able to read their 
emails, so they didn't know that. So they shut us down 
temporarily. And then when we got a copy of the memo--because 
one customer that was working sent it to us--we sent it to them 
and then they logged in and said, Yep, keep working; you are 
not on stop-work order. There's a lot of confusion--to Mr. 
Krone's point, a lot of confusion even amongst the government 
staff.
    Ms. Wexton. Some consistency would help.
    Okay. And then I see----
    Mr. Connolly. Go ahead. I interrupted you. Go ahead.
    Ms. Wexton. Mr. Krone, you talked about reassigning 
employees. And you have 32,000 employees, so you have the--a 
number of different contracts, so you are able to do that.
    Mr. Krone. Right. Much easier, right.
    Ms. Wexton. I guess my question is, what impact were you 
hearing about from the subcontractors that you work with? 
Because presumably----
    Mr. Krone. Oh, very difficult.
    Ms. Wexton [continuing]. it was making it hard for you to 
pay their invoices.
    Mr. Krone. Yes, very, very difficult. And we don't get 
processed, therefore, there are--any deficiency clauses and 
other things. It makes it very difficult to pay our subs. Many, 
many times, we couldn't even contract the--contact the 
contracting officer at the agency to get direction, because 
they weren't--although they may have come in on their own, they 
weren't allowed to answer the phone, they weren't allowed to 
adjudicate some of our issues.
    And although we are larger and more diverse, and so we were 
able to move people around, certainly our small businesses are 
not, and they had no choice but to furlough their work force.
    Mr. Berteau. Mr. Chairman, would you indulge me to--allow 
me to elaborate on that as well?
    Mr. Connolly. Of course.
    Mr. Berteau. One of the problems, especially a smaller 
company faces, even if they have the objection to do what 
Leidos did in this case, is when the government reopens, the 
contracting officer of the originating place where that 
contractor was working, will wonder, Where's my guy? Right? How 
come he's not here? Well, you laid him off. We had to move him 
to another contract, right? So there's--you can suffer both 
ways in this circumstance if you're not careful. You probably 
ran into that.
    Ms. Aleman. It's a reputation hit.
    Mr. Krone. Let me just clarify that. When we move someone 
to another contract, they actually say, Well, I like this other 
contract, I may like it better. I may actually get paid working 
on this Air Force program instead of a program for Department 
of Energy. And we have to be thoughtful about now, if you will, 
forcing that employee to go back.
    And it is disruptive, at least--by the way, the start-stop 
costs, which I think we've only touched on, stopping a contract 
and then restarting it, and the inefficiency that that creates, 
both on our side and government side, is tremendous.
    Ms. Wexton. And you have a duty to mitigate any damages 
that might be associated with that as well.
    Mr. Krone. Yes, we do.
    Ms. Wexton. Right? So I don't know--is that interpreted 
that you need to force that employee to go back, or we don't 
know?
    Mr. Krone. Yes, we have a Constitution that doesn't allow 
us to do that. And we allow our employees as much latitude as 
we can. Our employees are our most valuable resource. And to 
keep them happy and to show them that they're valued and 
appreciated, and if an employee says I really want to do this, 
and this is my third shutdown--maybe they were there in 1913--
we were heavily impacted in 1913 by the shutdown. We're very 
thoughtful about--we can't force anyone to do anything----
    Ms. Wexton. Right.
    Mr. Krone [continuing]. right? So we can beg, borrow, hope, 
incentivize, wish, but if that employee says "No, I do not want 
to go back to that DHS, Department of Energy, FAA contract," 
where we have IM representation, then we would rather keep that 
employee on a contract than force them to go back.
    Just--ma'am, if I could, we have, today, 1300 open 
positions, about half of those in the national capital region. 
So the ability of an employee to pick and choose a job or a 
contractor is almost unprecedented in my 41 years in the 
industry. And they literally can pick up a Washington Post and 
find a job tomorrow and move across the street. And they have 
mobility that is unprecedented in our experience here.
    Mr. Connolly. And to make it all special, you are about to 
compete with 25,000 job openings in Amazon, and they're 
accelerating hiring.
    Ms. Wexton. Thank you very much.
    Mr. Krone. And, Mr. Chairman, we've already felt that.
    Ms. Wexton. Thank you, Mr. Chairman, for your indulgence.
    Mr. Connolly. No, no. Thank you, Ms. Wexton.
    Mr. Raskin.
    Mr. Raskin. Thank you very much, Mr. Chairman, and thank 
you all for your testimony.
    The disruption caused by the last shutdown in Maryland was 
profound and comprehensive. And I know that the same 
devastating impact was felt in the District of Columbia and in 
Virginia. So, I thank you all for your seriousness in 
addressing this, and for taking the care that you did in 
preparing your testimony, which I thought was excellent.
    Mr. Grabowski, let me start with you. As an elected 
official, I heard--and I'm sure my colleagues did--from lots of 
constituents who considered this emotionally and 
psychologically devastating period for them and for their 
families.
    And I wonder if you would just speak to what the experience 
of workers is going through the shutdown.
    Mr. Grabowski. Yes, Congressman.
    First of all, like I said, it happened over the holidays. 
And we already spoke earlier about the communication gap. Most 
of us use government email. Well, that was gone. So we had to 
deal with the stress in trying to communicate to people, Hey, 
this is where you can seek resources. And we had no information 
about unemployment compensation.
    So the anxiety--trust me, my phone was ringing from seven 
in the morning till midnight, people asking, When can we go 
back to work? And I can tell you this as president of our 
local, it's not very often I get consensus on something, but I 
had 100 percent consensus, they didn't want a shutdown, they 
want to get back to work.
    So everything you can think from that aspect. We had 
members where both spouses were not working, but they had kids 
in daycare. They had to put their--still keep their kid in 
daycare and pay for it. Because it's a small business. If they 
didn't keep their spot filled, they would lose it. So it's a 
very important service, and that's a small business. So things 
like that that--you had to lay out money, which you normally 
wouldn't have to.
    And so it's very stressful for my members.
    Mr. Raskin. A lot of people think that when the shutdown 
ended, the problems ended. But I wonder whether any of you 
would speak to--to the long-term impact, in terms of loss of 
employees, employee morale, and just trying to recover from the 
shock of these financial events. I don't know--Mr. Berteau.
    Mr. Berteau. As of two weeks ago, Congressman Raskin, we 
still had member companies who had not had invoices paid from 
work done before the shutdown. Those invoices were still in 
process, right, still being reviewed and being processed.
    Mr. Connolly. I think that goes back to December.
    Mr. Berteau. Back to invoices filed before December 21 for 
work done, paid for, before December 21. Now, that's not 
common, but it's not out of the question. That's the far end of 
the lasting effect.
    Mr. Krone. Congressman, one point--you may have picked up 
from a prior conversation, but this is important. Everyone 
thinks that the shutdown ended on the 25th. The shutdown ended 
on the 25th for government employees. The shutdown didn't end 
for our employees until we got a letter from a contracting 
officer authorizing us to come back to work. That took weeks.
    So where it may have been 35 days for government employees, 
it could be another 14 days or more for the contractors, 
because the contracting officer had to come to work, get 
through the pile of paper, figure out what contracts were under 
a stop-work order, and then to prioritize those and then 
authorize the contractors to come back.
    We had 893 employees who were furloughed. About 400 of 
those employees used up all of their vacation and then went to 
what we call negatively. We let them take vacation they had not 
earned. It will take them years to build back what we called 
paid time off, which is vacation and sick leave combined. It 
will take them years to build back that base of paid time off 
bank that they had prior to the shutdown.
    Mr. Raskin. Did you favor this idea of an automatic 
rescission of a stop-work order at the point at which the 
government shutdown ends so that people can----
    Mr. Krone. Oh, we would certainly favor that.
    Mr. Raskin. Ms. Aleman.
    Ms. Aleman. To the point that we also mentioned earlier, 
just having clarity around the rules and regulations and the 
processes around a shutdown for stop-work orders and restart, 
so that everybody is clear in advance of a shutdown and knows 
how to operate, and it's abundantly clear, like much of the 
FAR--you have clarity as to the paths that can take place. If 
there's clarity--if we're going to use shutdowns in the future 
continuously, if there's clarity around it, we can all respond 
proactively, and our government customers can respond 
proactively as well.
    Mr. Raskin. Yes, it seems a little bit sad that we would 
have to basically develop procedures and rules for a shutdown, 
as if this is going to become normal operating procedure. 
However, we've got to get ready for it, because it's 
fantastically expensive and disruptive.
    Yes?
    Mr. Berteau. One other impact that's worth noting is that 
the agencies affected by the shutdown are way behind in getting 
the work out that they need to have done for their fiscal 1919 
appropriations, which, of course, they didn't get until 
February 15, right?
    And so the impact of shutdown not only extends to the work 
being done under previous contracts, but extends to the 
solicitation/evaluation award of new contracts. And that's very 
widespread across--and I think we're all seeing delays there in 
terms of solicitations that were expected, that were built into 
the work plans, that you had hired people and put them on the 
payroll to be able to perform the work, although you're not 
getting reimbursed on them yet. That kind of impact is 
continuing well into the year.
    Mr. Niggel. The final--sorry. The final lingering impact is 
our concern over performance ratings. Will we be downgraded 
during the shutdown period because, A, we couldn't legally 
come, but they don't realize that sometimes. So we're concerned 
about poor performance ratings, when we have the highest 
ratings that you can get, and we could get dinged and that 
jeopardizes our future business.
    Mr. Raskin. Right. The government shuts down, and then you 
get the bad grade for it.
    Mr. Niggel. Right.
    Mr. Raskin. Mr. Chairman, would you permit me one final 
question?
    Mr. Connolly. Absolutely.
    Mr. Raskin. I promise it will be very fast.
    If each of you could synthesize your views of the 
government shutdown, as a way of doing business, in one word, 
what would it be?
    Ms. Norton. And not a curse word, please.
    Mr. Raskin. Yes, make it something publishable.
    Mr. Grabowski. Disastrous.
    Mr. Raskin. Disastrous.
    Mr. Krone.
    Mr. Krone. Unthoughtful.
    Mr. Berteau. Abominable.
    Ms. Aleman. Insanity.
    Mr. Niggel. Uncertainty.
    Mr. Raskin. I yield back. Thank you, Mr. Chairman.
    Mr. Connolly. All diplomatic.
    Well, let me just say--well, are there other questions for 
the panel?
    I want to thank you all. This has been quite thoughtful.
    And, Mr. Berteau, I do think if you voluntarily are willing 
to undertake it with Mr. Chvotkin and your colleagues at PSC, I 
think there's an opportunity here to provide a compendium of 
the issues that affect us that many of our colleagues are not 
aware of.
    And from --I mean, the idea that, well, Federal emails are 
shut down, so we can't even notify our employees not to come to 
work; the contract officer isn't there, so we have no one to 
answer questions about the provisions of the contract and how 
they kick in and whether they don't. Stop-work orders were 
efficient about; start work, not so much.
    The issue of a contract about to be reauthorized or re-
upped expiring during the shutdown and you lose a contract for 
no substantive reason other than the system isn't operating, to 
just cite some of our problems.
    I think all of those, it seems to me, are things we can and 
should address. And I think there's a--and as Ms. Norton 
pointed out, also the unemployment, there may be guidance at 
the Federal level we can provide for unemployment insurance. 
And as Mr. Raskin says, we don't want this to become the new 
normal, but we have to have a fallback plan and we didn't, in 
the event of a future shutdown. The real answer is, don't shut 
down.
    Thank you all so much for participating here today.
    We're going to take a five-minute break while we change 
panels, and we'll hear from our second panel in five minutes.
    And second panel, Jaime Contreras, Toni Crescenzo, Wesley 
Ford, Tamela Worthen and Mark Hall, if you'll get yourselves 
ready to come forward.
    Thank you all so much.
    Mr. Connolly. The committee will come to order. And I would 
ask, again, our witnesses to stand and raise their right hand 
to be sworn in.
    Do you swear or affirm that the testimony you're about to 
give is the truth, the whole truth, and nothing but the truth, 
so help you God?
    Thank you. Let the record show the witnesses answered in 
the affirmative.
    And I want to introduce you.
    Okay. Our first witness is Jaime Contreras. Mr. Contreras 
represents over 20,000 members in the Washington, DC, and 
Baltimore area. Their numbers include government cleaners, 
security officers, and maintenance workers, obviously, many of 
whom were affected by the shutdowns.
    Tony Crescenzo is the chief executive officer for 
IntelliDyne in Falls Church here in Virginia. IntelliDyne is a 
professional consulting firm to government clients that faced 
impacts during the 2013 shutdown after just hiring 17 employees 
who were deemed nonessential. How special. In the last 
shutdown, several employees on the DOJ contract were also 
affected. Mr. Crescenzo will discuss the overall impact on 
morale and fear of more voluntary turnover.
    Wesley Ford, good to see you again.
    Mr. Ford owns a coffee shop in a government building that 
was largely shuttered during the shutdown. TKI Coffee lost 
significant revenue but was still expected to pay rent even 
though his source of revenue had dried up.
    Tamela? Is that correct?
    Ms. Worthen. Yes.
    Mr. Connolly. Tamela Worthen is a security officer at the 
Smithsonian and an SEIU member. She is a security guard that 
was furloughed by her contracting firm, Allied Universal. She 
has endured significant financial hardship affecting her 
ability to pay her mortgage and to get vital prescription 
medications. We're going to hear her personal story.
    Thank you for coming today.
    And Mr. Mark Hall is the executive vice president and chief 
strategy officer of ServiceSource in my district in Oakton, 
Virginia. Mr. Hall represents an organization that consists of 
five nonprofit organizations and operates in 13 states and in 
Washington, DC. It has over 80 AbilityOne contracts which 
provide employment opportunities for people with disabilities. 
Many of those employees were out of work during the last 
partial government shutdown. And I am an AbilityOne champion, 
and I did my service in the Old Executive Office Building and 
saw firsthand, you know, what the dignity of work can do for 
people and also how great this work force really was. And to 
have them being affected really bothers the heart. So we'll 
hear that story as well.
    Mr. Contreras, please proceed. Everyone has five minutes to 
summarize or read their report. We prefer you summarize. And if 
you don't need all five minutes, we can get to questions faster 
Mr. Contreras.

   STATEMENT OF JAIME CONTRERAS, VICE PRESIDENT, 32 BJ, SEIU

    Mr. Contreras. Thank you. Good morning, Mr. Chairman. I am 
Jaime Contreras, vice president SEIU Local 32BJ. First, thank 
you for the opportunity to testify in front of you today. Thank 
you, members of the subcommittee as well.
    You know, 32BJ represents around 175,000 members throughout 
the East Coast, 11 states, including 20,000 in this area. Our 
members secure the region's office buildings, both commercial 
and Federal, museums, colleges, and airports. Thousands of our 
members are people of color, immigrant workers, you know, 
African American, and folks who come from all walks of life. 
They work hard every today to support their families, and they 
love the job that they do for the Federal Government.
    Approximately 600 of our members who work for 
subcontractors in the area were impacted by the--if you ask me 
one word, I would say inhumane shutdown that happened. It was 
unnecessary, for 35 days. You know, and as you've heard by 
other speakers before, they're not--they don't work for the 
Federal Government, so they don't--it's not guaranteed that 
they're going to get paid. So they're--you know, the shutdown 
left federally contracted security officers, cleaners, food 
service workers, and other workers, who already make less money 
than direct Federal employees, without pay for more than a 
month, and that to me is shameful.
    For workers who already live paycheck to paycheck and many 
times work two and three jobs, you know, this was just an undue 
hardship to them.
    Just some quick stories about some of our members who were 
impacted. This is just a few of 600 of them just for our local 
alone.
    Julia Quintanilla, who cares for a severely handicapped 
child and a sick mother, she lost her entire savings during the 
shutdown. Yvette Hicks had to ration her children's asthma 
medicine during the shutdown. Donna Kelley, who also works at 
the Smithsonian, succumbed to having to apply for food stamps 
and feared eviction throughout the whole process. Kaneisha 
Onley lost her car because she couldn't make her payments. And 
then when the government reopened, she couldn't get back to 
work because her car had been lost. You're going to hear 
Tamela's story in a minute.
    So parents, children, independents all felt the pain, the 
ripple effect of this really life-altering and, as I call it, 
shameful shutdown. You know, we want to thank all of you who 
are in front of me because I know you have led many efforts to 
try to get these workers paid, from passing bipartisan 
legislation to sending letters to Congress, you know, trying to 
include backpay for these workers in supplemental 
appropriations bill for Fiscal Year 2019 and, you know, regular 
appropriations for Fiscal Year 2020.
    We have sent--the centers have sent letters to OMB to 
basically tell them it's within OMB's power to direct the 
agencies to pay these people without congressional action, so 
we really truly appreciate that.
    But you know--and there remains, you know, attached--
connected with OMB, a very practical way for contractor workers 
to receive backpay, you know, through the process that agencies 
themselves already have. In fact, at any point, agencies in the 
Federal Government, like FEMA or Smithsonian or Department of 
Interior or others, can use discretion within their contracts 
to ensure the contractors will get paid and be reimbursed so 
that they can pay their workers.
    And, you know, the cost of backpay, the savings, the 
windfall of the government, it's having--by not paying these 
workers is really on the backs of these workers who are already 
struggling to make ends meet and live paycheck to paycheck 
every day.
    So my message is very clear. You heard it before. You're 
going to hear it again today. This shutdown inflicted 
tremendous harm to our members and many others around the 
country. The need for workers to cover their medical bills, 
rent, loan payments, and simply feed their families should not 
be seen as a partisan issue. And I know that you understand 
that. So it's really well--it's within Congress' scope to be 
able to right this wrong for our members.
    So, again, thank you for having me testify today. You know, 
I always get a--it's always a blast to be in the same room with 
business--labor and business speaking on something with a 
unified voice. So thank you very much for having me.
    Mr. Connolly. Thank you, Mr. Contreras.
    Mr. Crescenzo.

   STATEMENT OF ANTHONY CRESCENZO, CHIEF EXECUTIVE OFFICER, 
                        INTELLIDYNE LLC

    Mr. Crescenzo. Thank you, Chairman Connolly.
    Chairman Connolly, distinguished members of the committee, 
my name is Tony Crescenzo. I'm the chief executive officer of a 
Federal contractor, IntelliDyne LLC. It's my pleasure to appear 
before you today to provide testimony on how the government 
shutdown affected not just us but Federal contractors in 
general and to provide recommendations to address the issues 
created.
    IntelliDyne is a midsize Federal contractor located in 
Falls Church, Virginia, with over 200 employees. All 
IntelliDyne's contracts are Federal Government contracts, and, 
therefore, every one of our employees supports, directly or 
indirectly, the Federal Government.
    IntelliDyne has been in business for over 20 years 
providing enterprise information technology, consulting 
services, and support. Our primary supported agencies include 
the Defense Health Agency, the Department of Justice, the 
Department of Homeland Security, and other Department of 
Defense activities and organizations. IntelliDyne provides 
highly skilled personnel to manage and secure critical agency 
IT infrastructure and networks against the existential 
cybersecurity threats that they face daily. We have protected 
and maintained the vital evolving IT network for nearly 20 
years.
    Like many Federal contractors, IntelliDyne's commitment to 
our Federal Government clients isn't simply a contract for 
services. We take on our Federal Government clients' mission as 
our own. And we know the risks that arise immediately with any 
failure to maintain a continuously secured agency 
infrastructure.
    I commend this subcommittee for undertaking an examination 
of this important topic. Federal Government shutdowns have 
significant and lasting negative impacts on Federal 
contractors, their employees, and the agencies they support. 
These deleterious effects have long gone underrecognized and 
unaddressed. These negative impacts can profoundly affect many 
different businesses and performance areas for Federal 
contractors. Among them financial stability and necessary 
credit facilities, human resources, an ability to maintain 
qualified personnel, contract and quality performance 
management, and the ability to ensure continuity of services 
and a robust effective security posture.
    As it relates to impacts to financial stability and credit 
facilities, government shutdowns have immediate significant 
adverse financial effects on Federal contractors as they lose 
billable labor revenue with no reimbursement. Contractors are 
faced with a choice: Retain furloughed employees during the 
shutdown and continue to pay them, minimizing or eliminating 
the financial impact on the employees and their families; or 
laying furloughed employees off, resulting in often life-
altering negative financial impacts for those employees and 
their families.
    Either option presents an untenable hardship for the party 
bearing the financial burden, employer or employee. For Federal 
contractors, particularly small and midsize contractors, 
retaining furloughed employees represents an outsized financial 
burden as payroll costs may be in the hundreds of thousands or, 
in our case, millions of dollars.
    Covering unreimbursed salary and benefit costs puts 
contractors in the position of needing to use and exhaust 
capital reserves or borrow against credit lines, risking 
noncompliance and failure of bank lending covenants or 
resorting to using subprime credit facilities just to meet 
payroll and other costs of business during a shutdown.
    Smaller contractors with large proportions of furloughed 
employees can and indeed have been driven into a weakened 
financial position that lasts long after the shutdown ends. 
This disproportionally large and lasting financial impact of 
government shutdowns on small and midsize Federal contractors 
undermines the efforts of small business programs throughout 
the government to expand and sustain opportunities for small 
business and Federal contracting.
    Understanding the lasting financial impacts of government 
shutdowns on Federal contractors, we respectfully recommend the 
following suggestions as a means to mitigate adverse financial 
impacts, the details of which are contained in my written 
testimony.
    One, make a provision to keep government personnel, 
supervisors, and contracting officers onsite for all contracts 
so productive work of Federal contractors can continue. Two, 
build a reimbursement contingency in the contracts that either 
guarantees line-of-credit loans with banks working with 
organizations that have nonessential contracts or reserve 
funds, approximately 5 percent, of the contract value, to 
minimize the effect of shutdowns.
    Three, expand the definition of essential work to include 
contracts designated for the common good, those reasonably 
necessary to prevent greater eventual losses and risk 
continuity of security.
    Four, minimize financial impacts to contractors by allowing 
other direct costs to be paid out during the shutdowns to 
permit contractors to conduct required training without billing 
for labor. Federal contractors also experience negative 
financial impacts owing to the inability to receive timely 
reimbursements from the government for hardware and software 
receivables during shutdowns.
    During shutdown periods, the government may not have the 
ability to pay for money already spent by the contractor. 
Contractors must then either bear the financial burden of 
paying suppliers without corresponding reimbursement or risk 
jeopardizing their supply chain, their relationships, and 
credit facilities by failing to pay suppliers on time.
    The inability of Federal contractors to timely pay 
suppliers during shutdowns will have the expected eventual 
effect of decreasing the number of suppliers willing to accept 
contracts with Federal contractors resulting in higher prices 
paid by the government.
    Mr. Connolly. If you could sum up, Mr. Crescenzo.
    Mr. Crescenzo. Excuse me, sir?
    Mr. Connolly. If you could sum up. Five minutes is up.
    Mr. Crescenzo. I'm sorry, sir. I'll end.
    Mr. Connolly. Are you sure?
    Mr. Crescenzo. Yes.
    Mr. Connolly. Okay.
    Mr. Ford.

        STATEMENT OF WESLEY FORD, PRESIDENT, TKI COFFEE

    Mr. Ford. Good morning. I'd like to start by saying thank 
you, Chairman Connolly, for inviting me to speak before this 
committee even though it doesn't seem like I fit in here email 
because I'm not a government contractor here.
    My name is Wesley Ford, and I am president of TKI Coffee, 
Incorporated, a small coffee cafe in downtown D.C. I'm located 
one block west of the main visitor entrance to the White House, 
and 90 percent of my customers are government employees and 
tourists that visit our national treasures here in Washington, 
DC. I've been in business for four years and have had the great 
fortune of being profitable since my third month in business. 
My staff is very diverse, three of whom are actually convicted 
felons that I have given a chance because no one else would. 
They have ended up being my best absolute role model employees, 
one of whom is now today the manager of my store.
    The average hourly wage for my staff is $16 per hour, and 
these wages are under tremendous downward pressure because of 
the instability of the government. January 2018 through January 
2019 has been the most challenging business environment that I 
have ever encountered. Three government closures, January 2018, 
February 2018, and then what I like to call the big one, 
starting December 2018. What many folks don't understand is 
that, while the last closure may have lasted 35 days, it had a 
direct impact on my revenues for well over 60 days. Many people 
look at me like I've lost my mind when I say that the closure 
was more than 60 to 75 days in length.
    Coffee and eating out are what I like to call niceties in 
life, not necessities. When it became apparent that the closure 
was going to happen, spending on these niceties stopped well 
before December 22d. When the government reopened on January 
26th, employees had not been paid for two cycles, thus they had 
no money to spend, even though they were back at work. Then you 
consider that when the government did reopen on January 26th, 
it reopened under a big black ominous cloud with a possibility 
of closing again on February 15.
    So guess what? Spending for niceties wasn't happening. 
People didn't really start spending again until the latter part 
of February, early part of March, is when I started seeing my 
revenues come back together.
    What are the effects of the shutdown on my business? One, 
it reduced my revenues, I'll note that I'll never be able to 
recoup. The net effect on those reduced revenues on a small 
business like mine is that it severely devalues that business.
    Two, during what I like to call the big one, I had to lay 
off almost 40 percent of my staff and reduce the hours of the 
remaining employees. Unlike government employees, my employees 
will not receive backpay. Unlike government employees, banks 
would not extend bridge loans to my employees to help them 
through the closure. Unlike government employees, landlords 
would not work with my employees on past due rents or deferral 
of rent payments. One of my employees actually lost his housing 
as a result of this government shutdown.
    Three, because of the layoffs, I'm expecting my cost of 
doing business to actually increase because of the increased 
cost of unemployment contributions.
    In my humble opinion, a government shutdown is unnecessary. 
And at the root, it is a failure on the part of all of our 
elected officials. The past shutdown was exacerbated simply 
because egos on both sides of the aisle got involved. There was 
plenty of room for compromise based on previous positions 
staked out by both parties.
    So the big question, what do I want out of this? I want my 
elected officials to understand that even the best economists 
in the world cannot accurately encapsulate the true cost to the 
U.S. economy and its people from a government shutdown. I want 
my elected officials on both sides of the aisle to dispense 
with their self-serving egos and do what's best for their 
constituents. I want to see legislation pass that prevents 
government shutdowns from being used as leverage because of the 
inability of our politicians to find a viable middle ground.
    In closing, I would like to ask one simple question of my 
elected officials: Will you commit to finding a middle ground 
this September, or will you be closing the government again and 
further tarnishing the reputation of our great country?
    Mr. Connolly. Thank you, Mr. Ford.
    Ms. Worthen.

STATEMENT OF TAMELA WORTHEN, SECURITY GUARD, NATIONAL MUSEUM OF 
                    AFRICAN AMERICAN HISTORY

    Ms. Worthen. Good morning, Chairman, Mr. Connolly. Thank 
you so much for making it possible for me to have a voice and 
to share my personal feelings on how the furlough impacted me 
in several ways in my life before this committee.
    My name is Tamela Worthen. I work as a security officer at 
the National Museum of African American History and Culture in 
Washington, DC. I missed several of my regular weekly paychecks 
during the longest government shutdown in U.S. history, and I 
still can't afford my diabetic medication or mortgage, car 
payments, timeshare for vacation, et cetera. I was even rushed 
to the hospital because I could hardly breathe as a result of 
missing my medication and couldn't pay my monthly premium. I 
feel so overwhelmed by the impact of the shutdown and potential 
for future funding lapses that I'm applying to a new 
establishment, which this day, the establishment, they observe 
your credit history. But because so many establishments have 
sent delinquency notices to my credit bureau, it's going to be 
pretty kind of hard to get another job because they look at 
your credit.
    You can't prepare for it, especially if you don't have any 
money already. I'm in a difficult position of saving as much as 
I can while substantially catching up on bills, debt payments, 
paying back unemployment benefits and taking care of other 
financial causes inflicted by the shutdown that ended not too 
long ago.
    I want to refinance my home and go through my equity to try 
to solve some of the bills that I have. But because your credit 
score had been impacted with certain establishment being 
notified by the bureau, you know, of delinquency, that is 
impossible because you have to have a certain score, put it 
that way.
    When you're trying to get back on your feet. That's very 
hard. That's the problem with the world today. One man's 
decision is another man's pain. Backpay will certainly solve my 
today's financial dilemma.
    Thank you so much for having me here and hearing my voice.
    Mr. Connolly. Thank you for your willingness to share your 
personal experience, Ms. Worthen. We appreciate it.
    Mr. Hall.

STATEMENT OF MARK HALL, EXECUTIVE VICE PRESIDENT, SERVICESOURCE

    Mr. Hall. Good morning, Chairman Connolly, and other 
members of the subcommittee. Thank you for inviting me here 
today to talk to you about the impacts of the shutdown on 
ServiceSource, our employees, and the AbilityOne program. I'm 
an executive vice president with ServiceSource headquartered 
here in Oakton, Virginia. ServiceSource is an organization 
affiliate group of five 501(c)(3)'s with a mission to 
facilitate services and partnerships to support people with 
disabilities.
    We were founded in the early 1970's by a small group of 
parents that were trying to create opportunities for their 
children. And we became a part of the AbilityOne program in the 
early 1980's.
    The AbilityOne program is the largest source of employment 
for individuals we serve and for individuals with significant 
disabilities across the United States. More than 45,000 
Americans who are blind or with significant disabilities are 
employed through a national network of over 550 nonprofit 
agencies, including ServiceSource. Our employees provide mail 
services, document management, help desk, total facilities 
management, logistics, and food services for 41 Federal 
agencies including all branches of the U.S. armed services.
    The majority of the individuals working on ServiceSource's 
AbilityOne projects are in contracts providing basic government 
services in jobs, such as mail clerks, military dining 
attendants, and administrative support. They earn an average 
wage of over $13 an hour, and each receives a health and 
welfare fringe benefit of $4.27 per hour.
    While these are good entry level wages, many of the 
individuals working on ServiceSource's AbilityOne contracts, 
like many Americans, live paycheck to paycheck. During the 35 
days the government shut down, 79 employees working on 10 of 
our AbilityOne contracts were furloughed. Of course, employee 
morale suffered, and high levels of stress were shared by many. 
In response, as an organization, we committed to paying 
employees' wages and benefits from our reserves for the first 
two weeks of the shutdown. During the next two pay periods, 
some employees were able to use their limited vacation for 
partial pay, and others with no vacation went without pay.
    During the shutdown, our team maintained frequent contact 
with our employees to assess their well-being and determine 
their levels of stress. As a result, we learned that some of 
our employees needed direct assistance. We formed a Cans for 
Contractors food drive to secure food and other items, which we 
passed out. We also appealed to the help of a ServiceSource 
foundation, which is a separate 501(c)(3) nonprofit 
organization that supports the mission and--of ServiceSource.
    Through the foundation's support, we were able to provide 
each employee with backpay after the shutdown concluded. 
However, that decision impacts the foundation's ability to 
provide support for other needed services, including housing, 
therapy, veterans programs, and autism programs.
    While ServiceSource eventually received reimbursement from 
3 of the 10 contracts impacted, we lost more than 300,000 in 
contract revenue. I'm proud of all that we did to support our 
employees during the shutdown. I'm also proud of our employees' 
advocacy efforts.
    Let me take a moment to tell you about one individual, Fred 
Pickett, who was particularly outspoken. Fred's worked for 
ServiceSource for more than 27 years at the EPA. And the EPA 
was one of the contracts that was impacted.
    Like many of us, Fred finds fulfillment in his work and 
takes great pride in supporting the government. Fred was 
interviewed by the media, including print television and radio 
and was active on Capitol Hill. Fred's message was clear that 
he was frustrated with the broken routine and upset that he was 
caught in the middle of a political fight through no fault of 
his own.
    I personally know that Fred appreciates the time you're 
investing and learning more about the impacts of the shutdown 
and preventing future work disruptions. Fred and more than 
2,000 individuals employed through the AbilityOne program 
nationwide experienced a loss of work or reduction in hours in 
addition to personal and financial consequences. Congress 
passed legislation to provide backpay to Federal employees. 
Federal contract workers, especially AbilityOne employees, 
deserve equitable treatment and should be eligible for backpay 
like their Federal counterparts.
    Thank you very much, again, for the opportunity.
    Mr. Connolly. Thank you, Mr. Hall. I appreciate it.
    I know Mr. Beyer's schedule demands that he--he's going to 
have to leave a little early. So, with the indulgence of my 
colleague, I'm going to let Mr. Beyer have his five minutes 
now.
    Mr. Beyer. Mr. Chairman, thank you very much.
    I want to especially thank you all for making clear how 
much human pain was experienced and is being experienced 
because of the shutdown. I think sometimes if you just read the 
newspaper, you think, well, this is a fight among political 
leaders and the government shuts down. But there is just no 
concept of the impact that it has on health, on rushing to the 
hospital, on long-term bills, on--just the level of anxiety 
among you folks. So thank you for--I wish every one of our 
colleagues could hear that.
    And, Mr. Ford, I very much appreciate your frustration. I 
think we were all often frustrated with it. I also want you to 
know that everyone at this table was very eager to find the 
middle ground. But it takes two players to have a middle 
ground. I think, you know, Nancy Pelosi was very clear on 
December 20 that she'd be happy to sit down and negotiate until 
the cows come home as long as we open the government up again, 
but they weren't willing to do that.
    Mr. Connolly. If I may interrupt, and not at your expense 
if we freeze the time. But I think it is important to remember 
an agreement had been reached. The President had agreed to go 
forward with the funding of the government. It was only after 
he got criticized on a right-wing television that he abruptly 
changed his mind and pulled the plug. Against the advice of 
Republican Members of Congress, he decided two people on FOX 
News were more important than the rest of us on a bipartisan 
basis. And we had--that was a unilateral action by the 
President. And as a result, the government shut down.
    But that was something he triggered. It wasn't something 
where there were lots of egos involved that, you know, caused 
this to happen. It was one ego that caused this to happen over 
an issue that was unrelated to the funding of the government: 
the wall.
    I ask that an extra minute be restored to my friend. I'm 
sorry. But I wanted to----
    Mr. Beyer. Thank you for clarifying it.
    We learned during the shutdown that nonessential employees 
who weren't working, both contractors, Federal agencies, even 
coffee shops, could apply for unemployment insurance, but the 
essential employees couldn't because they were working. But 
even if you could prove that you weren't working and that you 
were applying for other jobs, which is a condition of getting 
unemployment insurance, if you did get paid back, then you had 
to repay the unemployment benefits. Just a total mess.
    Ms. Worthen, you applied--did the unemployment benefits 
come in time? Did they make a difference with all the different 
bills that you had to pay?
    Ms. Worthen. Not really, because they don't pay you what 
you make on your job. So it's always a shortage somewhere. And 
then you have to apply for two jobs within that week to be able 
to get the benefit, so----
    Mr. Beyer. Two jobs that you know you're sort of doing 
fictitiously because you're expecting to go back to your real 
job.
    Ms. Worthen. Right.
    Mr. Beyer. So there's a--yes. So there's a loss of faith 
there too.
    Mr. Contreras, did you end of losing many employees through 
the course of this?
    Mr. Contreras. Well, I mean, our--you know, just at the 
Smithsonian alone, you know, there were at least 35 security--
we represent close to 300 and so security officers at 
Smithsonian museums. But 35 of those officers just gave up. I 
mean, they had to have income coming in to feed their families, 
pay their bills, and take care of, you know, their loved ones, 
so they quit. They went to find work somewhere else. I mean, 
they're members of our union. And that's just one side.
    There were people who had to--they felt forced to, you 
know, go do something similar. I mean, honestly, some of these 
folks were veterans, people--you know, I served in the U.S. 
Navy as well, and I too--when I was having conversations with 
them, they felt betrayed by their country.
    Mr. Beyer. One of the ironies of this is that while the 
government is unwilling to pay us, you know, contract employees 
and Federal employees, it still expects its bills to be paid on 
time.
    Mr. Crescenzo, did many of your employees have student 
loans that were due and----
    Mr. Crescenzo. No, Congressman. Many of my employees don't 
have student loans. However, almost 30 percent of my employees 
are post-9/11 veterans who don't have big savings, who don't 
have any savings, or they are military spouses who are greatly 
affected by a shutdown when they're not getting paid. We, on 
the other hand, paid all of our employees. But we bore that 
cost alone.
    Chairman, I'd like to just make a comment about the issue 
of the last shutdown. Politics has been around since the birth 
of this country, and it will continue on into the future. It's 
the rock in the stream. We still need to navigate the stream. 
So I commend the committee on future tasks that we can take, 
future moves that we can undertake, that will ameliorate some 
of these larger issues.
    Mr. Beyer. I'd also just like to thank Mr. Ford for 
employing ex-offenders. You know, we have 4.4 percent of the 
world's population, 22 percent of the world's incarcerated 
individuals, most of whom are going to be let out again, and 
their best source of not going back is to be able to get a good 
job. So thank you very much.
    Mr. Chairman, I yield back.
    Mr. Connolly. Thank you, Mr. Beyer. I thank you for 
participating and your commitment to trying to make sure this 
does not happen again.
    Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman. This has been very 
helpful testimony from all of you giving us yet another 
perspective.
    Mr. Crescenzo, I was concerned that, in your testimony, you 
spoke about the issue of IT and security systems--IT and 
security.
    Mr. Crescenzo. Yes, ma'am.
    Ms. Norton. Sometimes as we look for things that we can get 
done, Congress will pay attention--there was something on 60 
Minutes. I hope everybody saw yesterday. It was mind-numbing. 
That you ask that essential--that included in the definition of 
essential work should be those involved in the maintenance of 
security or IT systems. Now, what better way to steal the 
government's, in this case, money and resources than during a 
shutdown. How would you apply that across the board to 
contractors?
    Mr. Crescenzo. I think there are two different ways to look 
at that, Congresswoman. The first would be to either, through 
policy or some regulatory lever, to ensure that the parties 
responsible for the cybersecurity infrastructure for a 
particular agency, whether those parties be government 
employees or contractor employees, would be exempt from 
shutdowns.
    Ms. Norton. So, when you say ``maintenance,'' those 
involved in the maintenance of IT and security systems.
    Mr. Crescenzo. Correct.
    Ms. Norton. Describe for me who those are.
    Mr. Crescenzo. So, in every large government agency, in 
fact, in almost every government agency of any size, where 
there is an information technology infrastructure, there is a 
security operations center whose sole job is to secure the 
network, email, voice video, teleconference, and the 
information technology assets of that organization.
    That part of the organization, no matter who runs it, 
whether that's a combination of public, private, or it's a 
contractor exclusively run organization should be exempt. In 
the last shutdown just recently, at the Department of Justice, 
we had--we do have a security operations center that we run for 
the Department of Justice in the Civil Division, which is the 
one--as you know, one of the more busy divisions of the 
Department of Justice. Fortunately for us, the deputy CIO, a 
gentleman by the name of Todd Miller, furloughed almost 
exclusively government employees because he knew that, in order 
to maintain the security infrastructure of that agency, he 
needed the contractors there.
    Ms. Norton. Mr. Chairman, we might at least get their 
attention on the security aspects of this issue. We certainly 
have done the same for Federal agencies.
    I would like to--we hear this notion paycheck to paycheck. 
I would like to put on the record, if you would allow us, some 
sense of what employees, some of which you either are or are 
involved in, what would be the sources of income if, all of a 
sudden, as far as you know, if all of a sudden your one source 
of income, which is a check from a contractor, were cutoff? 
What have your employees done to remain whole even now but 
especially during the shutdown?
    Any one of you can speak up on that. Where do they go?
    Mr. Ford. My employees applied for and received 
unemployment.
    Ms. Norton. See, this is the private sector. So they--and 
one thing----
    Mr. Ford. And what I did to help them obtain their 
unemployment benefits is I didn't lay them off or I didn't say 
``subject to future employment.'' I just flat terminated them. 
They didn't understand that at first when they were saying: 
You're firing me?
    And I'm like: No. I'm actually helping you obtain your 
unemployment benefits.
    Ms. Norton. Did you hire them back afterwards?
    Mr. Ford. I was able to only hire one back.
    Ms. Norton. What? They got another job?
    Mr. Ford. They were able to find additional jobs. The 
layoff happened at a good point, if you want to call it that, 
in the economy, because--the low unemployment. So those that 
wanted to work were able to get their work.
    The one guy that I was able to get back was one of my 
convicted felons because nobody else wanted to pick him up 
because of his background. And I would have vouched for him if 
somebody would have called and asked for a recommendation, but 
it didn't happen.
    Mr. Crescenzo. If I may, we had some lessons learned from 
the 2013 shutdown. I was fortunate enough to be here earlier to 
hear the prior testimony. As a matter of course, we cross-clear 
employees to other contracts now as a result of the 2013 
shutdown.
    Ms. Norton. Would you explain what cross-clear means?
    Mr. Crescenzo. We have employees in the Department of 
Justice. They have a Department of Justice clearance. We have 
other employees at the Department of Defense, which has a 
completely different clearance process. They take different 
amounts of time.
    But given our lessons learned from the 2013 shutdown, we 
typically and almost continuously apply security clearances 
across all of our contracts for all employees. So, if we hire 
someone on to a DOD contract, we, at the same time, submit them 
for a DOJ security clearance so that in the event there is a 
shutdown, we can readily move those people.
    There is an issue that you can help with that we haven't 
addressed, which is PTO. As you know, vacation and paid time 
off can be donated in medical emergencies. That is there is no 
tax implication for employees.
    In the 2013 shutdown, we had 17 brandnew employees who had 
not ever worked for us before. Literally, on day one, they were 
furloughed, and they had no leave. What we did, and this can 
get a little bit arcane, but it is something that's usually 
resolved by you: Leave is a liability on our books. It is an 
expense that I must put onto my balance sheet at the beginning 
of year that says if I have 100 employees and they get 10 hours 
or leave, I have budget for 1,000 hours of leave. And at the 
end of the year, as you know, most people don't take all their 
leave.
    When they don't, we let them carry some over. But the rest, 
we take back. And why do we take it back? Because I can't keep 
a seven-figure expense on my books at the end of the year. 
That's why leave gets wiped out.
    However, in a shutdown, what we did is we allowed some of 
our employees--we asked every employee, as a matter of fact, 
over 87 percent of our company in 2013, pledged not to take 
leave that was on the books until the end of the year. That 
leave stayed there. But the employees in this particular 
shutdown--so we had--again, no employee was affected 
financially from our perspective. We were affected as a 
company. The employees were not because we took that leave that 
was pledged not to be taken, and we let those employees use 
paid time off that other employees had essentially abandoned. 
Rather than have us go through this arcane five-step process to 
avoid tax implications and audits, it would be a lot easier if 
we could just pass some legislation that would all government 
contractors during a shutdown to allow tax-free leave donations 
for colleagues who are affected.
    Mr. Connolly. Another thought for PSC. All right. They got 
it.
    Ms. Norton. Best practices.
    Mr. Crescenzo. PSC thought of that after we did, sir.
    Ms. Norton. Can I get put more thing?
    Mr. Connolly. One more thing.
    Ms. Norton. I'd like to just get on the record whether this 
bill I am sponsoring would help in any way any of your 
employees. Because Mr. Ford wouldn't expect his employees, but 
he talked about middle ground. It's really my attempt--it has 
many cosponsors--to find something for contract employees.
    And as I indicated to the last panel, while it wouldn't 
affect all of your employees, it goes to the employees who 
could least afford a shutdown. And in my bill, I name retail, 
food, custodial, security employees. I'm on another bill that 
says 200 percent of income of the employees. They amount to the 
same thing. I'd like to know if that bill would help any of 
your employees or would help you.
    Mr. Connolly. Real quickly.
    Mr. Hall. Congresswoman, that would help, but I would like 
to encourage you to expand the definition. So many of the 
people that we were impacted were mail clerks, paid much like 
custodians. They wouldn't be included.
    Ms. Norton. Mail clerks.
    Mr. Hall. Mail clerks. And there's other positions as well. 
So perhaps you could base it on income.
    Mr. Crescenzo. Yes. I was going to suggest that as well. We 
have many young veterans of Iraq and Afghanistan who are 
severely financially impacted in the event that they lose that 
money. And they are not highly paid people. They are people who 
are getting their first job coming out of the military, which 
both the government and private industry are going out of their 
way to help provide.
    But that creates an almost untenable situation for both the 
employer and the veteran when they get eliminated from 
consideration there just because they're in a nonexempt status. 
I would much rather see that be an income level.
    Mr. Connolly. Mr. Contreras, did you want to comment?
    Mr. Contreras. No, I'm--absolutely. I mean, what you have 
and what they said makes sense. It absolutely helps our 
members.
    Mr. Connolly. Thank you.
    Ms. Norton. We'll work on both of those bills and try to 
combine them to get them through. I'm trying to get them 
through at least the appropriation process.
    Mr. Connolly. Yes. Thank you so much, Ms. Norton.
    Ms. Wexton.
    Ms. Wexton. Thank you, Mr. Chairman. And thank you to the 
panel for coming and joining us today.
    Mr. Ford, I would like to say, I know you've said in your 
remarks that you didn't know why you were here because you 
weren't a contractor.
    Mr. Ford. Right.
    Ms. Wexton. But that's exactly why you are here. Because, 
you know, as we've heard, Federal employees get protected; 
Federal contractors don't. Some are better able to absorb those 
costs, and then subcontractors below them. But one of the 
groups that has been left without any recourse is those in the 
private sector.
    And as somebody who was sworn in and came to D.C. in the 
midst of this shutdown, every time I would go to a restaurant 
or a coffee shop, I would ask the employees how has business 
been during this shutdown? And it would be dead, nobody in the 
shop. So you are not alone and we understand what you're going 
through, and we want to make sure that we do not have these 
shutdowns again.
    Ms. Norton. And if I could just say to my colleague on this 
question of--in my own district, the District of Columbia, it 
suffered the worst effects of the shutdown, because of 
contractors and employees who couldn't shop and couldn't go to 
restaurants downtown. So the effect on overall business, and 
not only in the DMV, but in the country, ought to be noted.
    Thank you, Ms. Wexton.
    Mr. Ford. Can I make one comment?
    Ms. Wexton. Sure.
    Mr. Ford. The one thing that could potentially help a 
little guy like me--and I will say, I'm fortunate, if you will, 
to be leasing--my landlord is the United States of America, 
believe it or not.
    If we have a furlough again--not--rephrase that. When we 
have another furlough, somehow, somewhere, someway, can the 
rent be abated for the period that the government is shut down?
    Ms. Norton. That you pay the Federal Government?
    Mr. Ford. Ma'am?
    Ms. Norton. That you pay the Federal Government?
    Mr. Ford. No--yes, I pay the Federal Government. I was 
obligated to my rent on time.
    Ms. Norton. So he paid the Federal Government.
    Mr. Ford. Yes, ma'am. I had to pay the Federal Government 
whether I was in business or not, or I got shut out. Good-bye.
    So part of what you all could potentially consider is those 
of us that are leasing from the Federal Government would 
obviously be the most impacted by a Federal shutdown--is that 
our rent be abated during the shutdown because--and then we--it 
puts us in a better financial position--puts us in a better 
financial position, A, to survive the shutdown; B, to 
potentially help some of our employees to survive the shutdown.
    Ms. Wexton. And I want to thank you for also drawing 
attention to the fact that even after the shutdown ended on 
January 25, there was that continuing specter of it taking 
place again on February 15, and that that impacted a lot of 
employees' spending choices and ability to spend during that 
period of time.
    Mr. Ford. It was a ghost town in my shop, a literal ghost 
town.
    Ms. Wexton. And you stated in your testimony that it has 
impacted your cost of business moving forward. Is that correct? 
Your unemployment insurance has gone up?
    Mr. Ford. I'm anticipating it will increase my cost of 
business going forward, because of the employees that filed for 
unemployment--I make a monthly or weekly whatever--my payroll 
folks do this for me--but a contribution to the unemployment 
insurance for the District of Columbia. As long as I can 
maintain my--as long as I'm not terminating employees and a lot 
of employees are not filing for unemployment benefits, my rates 
stay low. When I begin--when I start seeing a rise in 
unemployment requests from my business, my rates are going to 
go up.
    Now, what I don't know yet--and I won't know this probably 
for another three to six months--is if my unemployment 
insurance rates are going to go up as a result of the filings. 
I don't know that yet.
    Ms. Wexton. And you, as an employer, have to make that 
difficult decision about whether to terminate the employees and 
give them that access to unemployment compensation, or whether 
to just furlough them or make them subject to recall whereby 
they might not be able to access that.
    Mr. Ford. And I chose to bite the bullet and terminate, 
which, again, is a morale buster of the biggest, largest 
proportion that you've ever seen. Because the employees that 
are still there, Oh, my God, am I going to get fired too? They 
understood it as being fired. They didn't understand it as 
being to their benefit to obtain unemployment insurance. They 
didn't grasp that fully.
    Ms. Wexton. Right. No. I understand.
    Mr. Ford. I think they do now.
    Ms. Wexton. I can see why they wouldn't understand that.
    Mr. Ford. Correct.
    Ms. Wexton. And why, as an employer, it would be easier for 
you to just furlough them and then you don't have to incur 
possibly the increase in your premiums and----
    Mr. Ford. Correct.
    Ms. Wexton [continuing]. feel good. But I understand that 
was a difficult decision on your part.
    Ms. Worthen, you testified that you had incurred--like you 
had not been able to pay some bills, and as a result, your 
credit score has suffered. Is that correct?
    Ms. Worthen. Yes, ma'am.
    Ms. Wexton. Okay. Now, I serve on the Financial Services 
Committee, and one of the things that we are looking at is to 
have legislation that would require that credit reporting 
bureaus correct the score and not downgrade your credit for--
for shutdown-related delinquencies in payment.
    Would that help you in the terms of correcting your credit 
score, and giving you the ability to refinance some things that 
you're not able to----
    Ms. Worthen. Sure, that would definitely--definitely help. 
Because with my bank, PNC, they was able--because I had my home 
for five years, never missed a payment until this furlough, 
they let me enter into this agreement to where if they give you 
six months--even though you don't pay your mortgage every 
month, but within that six months, as long as you still come up 
with the money, but there will be no late charge or nothing on 
it. But still--you still got to look at it this way: If you 
still enter into that agreement and you're still going back to 
work because of furlough, your money don't go up. You still got 
bills piling up. You know what I'm saying?
    Ms. Wexton. So it your bank accommodate you in terms of 
stretching out those mortgage payments, but they still reported 
it to the credit bureaus?
    Ms. Worthen. No, no. But some of the establishments did do 
that.
    Ms. Wexton. Okay.
    Ms. Worthen. Which I told them that that was very unfair, 
because I did my part as far as submitting a furlough letter. 
And when you submit that furlough letter, that is to let you 
know that you was affected with the furlough, that they will 
waive your late charges.
    Okay. But then two--but March and April, now they getting 
back--want to give you the late charge. And I go back and tell 
them, No, I'm still part of the furlough. Because if you're a 
month behind, what makes you think I'm going to be a month 
ahead? The money don't go up.
    Ms. Wexton. Right.
    Ms. Worthen. You just got bills and stuff piling up, and 
you got stuff on your credit. And I had real good credit. Now I 
can't even refinance my house. So I'm looking at avenues of 
what I'm going to do. Because I'm very consistent in paying my 
bills. I'm not consistent in staying home. I like to work.
    Ms. Wexton. We hear that a lot. We hear that a lot.
    May I ask just one question?
    Mr. Connolly. Yes, ma'am.
    Ms. Wexton. Mr. Crescenzo, you were talking about the 
impact on--on your organization. And I understand that you're a 
part of the Northern Virginia Technology Council. Is that 
correct?
    Mr. Crescenzo. Yes.
    Ms. Wexton. And have you observed that--that many other 
businesses within the council have been affected--were affected 
adversely by the shutdown in the same ways that you were?
    Mr. Crescenzo. Not only many other businesses during the 
shutdown, but we're also a mentor for a service-disabled 
veteran-owned business and a woman-owned business. And both 
were very badly mauled during the shutdown in terms of the--
both the financial and the--and the H.R. impact.
    We, for example, didn't have a single employee who missed a 
paycheck, and yet, our voluntary turnover doubled as a result 
of the shutdown. And every time you lose a billable resource, 
you lose the revenue that goes with that resource.
    Ms. Wexton. And just following up on that, if I may very 
briefly.
    You talked about cross-clearing your employees----
    Mr. Crescenzo. Yes, ma'am.
    Ms. Wexton [continuing]. for the clearances that they have.
    Mr. Crescenzo. Yes.
    Ms. Wexton. Is there a streamlined process to make that 
happen? Or is it just--is there any economy of scale of getting 
them cross-cleared at the same time? I understand that's 
probably a different hearing that we're going to have to have.
    Mr. Crescenzo. Congresswoman, it is the opposite of the 
streamlined process. It was a kluge that, because with have a 
full-time general counsel who is a brilliant legal scholar, we 
figured after a lot of time and effort, we found a way to do 
that that made it reasonable for us to do it for most of our 
employee population, but certainly not all, just the ones we 
felt would be most at risk in a shutdown.
    Ms. Wexton. Okay. Thank you. And thank you for doing that. 
And that's a future hearing idea.
    Mr. Connolly. While the good news is, Federal IT falls 
within the purview of this subcommittee. So maybe we'll have 
your back, Mr. Crescenzo, and we can pursue----
    Mr. Crescenzo. Very happy to do that, sir.
    Mr. Connolly [continuing]. what Ms. Wexton has just 
identified.
    Mr. Raskin.
    Mr. Raskin. Mr. Chairman, I want to thank you for your 
leadership in calling this hearing, and bringing us together as 
a DMV delegation, as well as members of the Government 
Operations Committee.
    And I'm very excited about putting together this package of 
proposals which go further even than the excellent legislation 
that Congresswoman Norton advanced during the shutdown. But 
we're learning a lot from this hearing and from all of the 
contacts. So I look forward to working with PSC on putting all 
of this together and pushing it--pushing it through the House.
    Mr. Ford, can I come back to you for a second?
    Mr. Ford. Uh-huh.
    Mr. Raskin. Where is your shop?
    Mr. Ford. I'd would prefer not to spell it out 
specifically, because I don't want my doing business out in the 
public light, because I try to maintain a neutral political 
position.
    Mr. Raskin. Gotcha.
    Mr. Ford. Because I want to serve both sides of the aisle, 
so to speak.
    Mr. Raskin. Yes. And you probably have a number of aisles 
in your store.
    Mr. Connolly. So Mr. Ford welcomes Republicans and 
Democrats to his coffee shop.
    Mr. Ford. I have numerous--yes, the Vice President has 
visited me. I've had numerous Republican and Democrat--I don't 
want to alienate either side, either party.
    Mr. Raskin. I gotcha. And we don't want to----
    Mr. Ford. I would love for you to come visit. I could give 
you off the record where I am and come on in.
    Mr. Raskin. Can you--can you tell us what your monthly rent 
is, and who you write your check to?
    Mr. Ford. I write my--no, because I would lay out who I 
lease from and where I am.
    Mr. Raskin. It goes to the U.S. Treasury?
    Mr. Ford. It goes to the U.S. Government.
    Mr. Raskin. Okay.
    Mr. Ford. And my lease is approximately $6,800 per month, 
is what I'm paying.
    Mr. Raskin. Okay. So during the shutdown, you paid 
something around $6,800 for that time. Did you literally shut 
the store down----
    Mr. Ford. No, sir.
    Mr. Raskin [continuing]. or there was just no action?
    Mr. Ford. My revenue was not zero, but my revenue was down 
considerably. I mean, substantially, actually.
    Mr. Raskin. So it stayed open, but there was----
    Mr. Ford. I stayed open. I can't--I mean, I'm one--I'm one 
coffee shop competing against--I'll call it the S word that has 
got 27,000 coffee shops.
    Mr. Raskin. Yes.
    Mr. Ford. I don't want to lose the few--I don't want to 
lose--I don't want people to break the habit of coming to me 
and then going someplace else. So I remained open to try--in 
fact, I stopped my own paycheck in an effort to remain solu--
whatever--solvent throughout this.
    Mr. Raskin. And your suggestion is that for small 
businesses, restaurants, coffee shops that are in the situation 
like yours, where your landlord is the Federal Government, that 
there would be a rent abatement during the course of the 
government shutdown?
    Mr. Ford. During the course of the government shutdown.
    Mr. Raskin. On the theory that the government has shut down 
as an employer, but they haven't shut down as a landlord; 
they're still collecting money, but----
    Mr. Ford. Correct. Now, here's part of my--my personal 
challenge for my shop.
    The agency from whom I rent was not shut down; therefore, 
they ruled that we don't need to abate your rent, because we 
were open for business and you were not impacted.
    They had their blinders on. They didn't look at the fact 
that I've also got Department of Interior, Department of State, 
Office of Personnel Management, Department of Homeland 
Security.
    Mr. Raskin. Right.
    Mr. Ford. All of those represent 70 percent of my business. 
And the agency from whom I lease from represents less than 40 
percent--30 to 40 percent.
    Mr. Raskin. Gotcha.
    Mr. Ford. So--and they also said it's not our fault. And 
I'm like, you're right, it's not. Absolutely it's not their 
fault.
    Mr. Raskin. Mr. Contreras, let me ask you something.
    The workers that you represent, I'm wondering whether they 
experienced this as something completely out of the blue, like 
a natural disaster, it was like a hurricane or earthquake, or 
did they see this as continuous with other assaults on the 
Federal work force and efforts to undermine their position, 
their pay, their benefits and so on?
    Mr. Contreras. I mean, it was--it was like a tsunami. I 
mean, you know, they're used to a day or two or couple of days 
government shutdown. And 35 days is just unbearable. You know, 
some of these workers, when they heard somebody on the other 
side of the aisle say, Well, you should just go tell your 
landlord that you will not paint their walls, or cut their 
trees or something as a way to pay, you know, help--you know, 
they were just offended.
    And, you know, they had to do personal loans. You know, if 
they work a cleaner in a Federal building in the day and 
security officer part-time at night, you know, they--they were 
furloughed in the day, they had to go clean houses on the 
weekend. You know, and these are not folks who have savings. I 
mean, they work two and three jobs because they have a lot of 
responsibilities. I mean, they spend it. You know, money in/
money out.
    Mr. Raskin. Yes. There were some statements made by people 
very high up in government that this is something like a day 
off or a vacation.
    Mr. Contreras. Terrible.
    Mr. Raskin. This is more like an eight or 10 percent pay 
cut that people took.
    Mr. Contreras. Yes.
    Mr. Raskin. When you strip a month of their salary away and 
introduce all of that stress and anxiety.
    Mr. Chairman, I yield back to you. Thank you.
    Mr. Connolly. Thank you, Mr. Raskin.
    Let me pick up on that, Mr. Contreras.
    So your members, they're all making six-figure salaries, 
right?
    Mr. Contreras. Right, that would be nice. I mean, our 
members, they--you know, they, what, make 30,000 a year, maybe 
less. Some a little longer, depending on how long they've been 
on the job.
    Mr. Connolly. Right. So we are talking really lower end of 
the income spectrum.
    Mr. Contreras. Absolutely.
    Mr. Connolly. And, Ms. Worthen, you're in that same boat?
    Mr. Contreras. Yes.
    Ms. Worthen. Uh-huh.
    Mr. Connolly. And to take a 35-day period of not being paid 
is not a minor or trivial issue in the lives of your members or 
you, Ms. Worthen; is that correct?
    Mr. Contreras. Absolutely.
    Mr. Connolly. Mr. Hall, tell us about your--the people you 
represent. Who are they?
    Mr. Hall. Individuals with significant disabilities 
employed in AbilityOne, where they go to work. I mentioned Mr. 
Picket had been with us for 27 years. We have lots of 
employees----
    Mr. Connolly. Right. And if they didn't go to work through 
your auspices--and there are some other organizations similar.
    Mr. Hall. They're sitting at home.
    Mr. Connolly. They're sitting at home.
    Mr. Hall. They're sitting at home.
    Mr. Connolly. And what does that do to self-esteem if you 
are----
    Mr. Hall. It lowers morale. It creates a lot of stress for 
some of our employees. They didn't have the money to go buy 
groceries. We had to start a food campaign. So, we stayed in 
touch with them, talked to them often. Eventually, we were able 
to make everyone whole, due to the generosity of our foundation 
and some donors. But during that 35-day period, it was hell for 
them, quite frankly.
    Mr. Connolly. Right, the longest ever, so nobody planned 
for 35 days.
    Mr. Hall. No.
    Mr. Connolly. The hope was, well, this would be a 
temporary----
    Mr. Hall. Why can't I go back to work and do my job?
    Mr. Connolly. Exactly.
    Mr. Hall. That's what I want to do.
    Mr. Connolly. And I would think it must have been a 
challenge for some of those folks to explain what this was.
    Mr. Hall. They didn't understand why they were pawns in 
this political battle which they really didn't understand.
    Mr. Connolly. And, likewise, to Mr. Contreras' membership, 
you know, the folks you are talking about are not making six-
figure salaries.
    Mr. Hall. No. On average, they make about $13 an hour.
    Mr. Connolly. $13 an hour. So the loss of this income----
    Mr. Hall. Means that they're----
    Mr. Connolly [continuing]. very devastating personally, but 
financially also.
    Mr. Hall. Financially, certainly during that--you know, 
they had to talk to landlords, miss car payments, had 
difficulty riding the Metro. Forget going to a movie or eating 
out. That all went away.
    Mr. Connolly. Ms. Worthen, you described a little earlier 
in your testimony--and I don't want you to describe your 
personal medical information. But you suffered a medical 
situation because you could not afford, as I understood it, the 
medicine you needed for an underlying medical condition. Is 
that correct?
    Ms. Worthen. Right. Or pay the premium.
    Mr. Connolly. Or pay the premium.
    Ms. Worthen. I don't mind sharing any personal thing, 
because it's a personal thing I went through. So it's good to 
let the record know that I don't mind sharing my story with 
anybody, because that's what I went through.
    Mr. Connolly. Right.
    Ms. Worthen. So to that factor, by me not being able to pay 
my premium, I'm not able to pay the copay to go see the doctor 
so that he can figure where I'm at with my A-1. You know what I 
mean?
    Mr. Connolly. And that's not something--I mean, that's not 
something that's optional for you.
    Ms. Worthen. Right.
    Mr. Connolly. You have to have that medicine?
    Ms. Worthen. I've got to have it.
    Mr. Chairman. Mr. Ford, why do you hire ex-convicts?
    Mr. Ford. A gut feeling. When I interview them and I talk 
to them--I haven't hired all of them. I've hired a few. When I 
sit down and have a long heart-to-heart conversation with them, 
and I realize that they are truly remorseful and that they want 
to get back as a productive citizen, I'm willing to give them a 
chance.
    I have hired some, and I have put them right back in jail 
because I caught them stealing money from me. I have no qualms 
about that. However, the ones that I have that have taken the 
opportunity are probably my single most loyal employees that I 
own--I wouldn't say I own--that I have. They'll walk with me to 
the end of the Earth. It's been a wonderful experience. And I 
think a lot of people should reconsider when an ex-con walks 
up.
    I have conversations with their probation officers. Two of 
them are right now still on active probation. I have 
conversations weekly, monthly, with their probation officers. I 
know what they're doing. I understand what they're doing, and 
they know what I'm all about. And they understand that I don't 
give--I don't care--as long as they are working and don't take 
anything from me, they will have a job.
    Mr. Connolly. Yes.
    Mr. Ford. If I can possibly maintain the employment.
    Mr. Connolly. I commend you for that.
    And I hope that the press that's here has captured the 
human impact of a 35-day government shutdown. Low wage workers 
trying to make ends meet, don't have savings to fall back on, 
devastating.
    A small businessman who wants to give people a second 
chance in American society, and is thwarted from doing so when 
the government shuts down, through no fault of his own. You 
know, a security guard at one of our museums faces health 
crisis because she can no longer pay her premiums and her 
copayments for necessary medication, creating a health crisis 
for herself, again, through no fault of her own. And a whole 
cadre of people who have an opportunity to achieve work and the 
self-esteem that comes with that, who are denied that, again, 
through no fault of their own because of a 35-day shutdown.
    The impacts are considerable. None of these impacts were 
particularly focused on during the 35-day shutdown. But they're 
very real, in real life. And we thank you all for coming here 
and sharing those experiences.
    Ms. Norton. Mr. Chairman----
    Mr. Connolly. Ms. Norton.
    Ms. Norton [continuing]. could I just make one statement in 
context? Almost none of the witnesses appearing today would 
have been appearing, I guess, when I was a kid growing up in 
D.C. And the reason they're here--remember, we have about 2 
million Federal employees, where we have more than 3 million 
Federal contract employees.
    Mr. Connolly. Right.
    Ms. Norton. Well, how did we get to that point? The Federal 
Government has, over time, made a decision to outsource much of 
the work of the Federal Government. That leaves these employees 
sometimes without leave they would have if they worked for the 
Federal Government, without pensions that you have if you're a 
Federal employee.
    So the Federal Government did that with great malice 
aforethought. They wanted to get that leave, they wanted to get 
those pensions, and, yes, they wanted to get those salaries off 
of the straight-out Federal budget. It doesn't seem to me that 
the Federal Government can, having made that decision, be 
allowed to escape responsibility----
    Mr. Connolly. Yes.
    Ms. Norton [continuing]. for what it has benefited from in 
saying to the private sector, "You do it, do it cheaper than we 
could do it, and we'll give you as many contracts as we can 
find." And I think we need to make sure that that isn't harming 
people who would otherwise work for the Federal Government if 
we did what we did only a generation ago.
    And thank you, Mr. Chairman.
    Mr. Connolly. Great observation. Thank you, Ms. Norton.
    I want to thank all of our witnesses for your testimony 
today.
    Without objection, all members will have five legislative 
days within which to submit additional written questions for 
the witnesses, if they can do that, through the chair, and they 
will be forwarded for their responses.
    I ask our witnesses, if you are given additional followup 
questions, to respond as expeditiously as possible.
    I want to thank our staff, our committee staff, our 
subcommittee staff, my personal staff, our recorders for making 
this look easy when I know it's not, when we do a field 
hearing. But thank you.
    And, again, thank you to George Mason University for their 
hospitality.
    We are adjourned.
    [Whereupon, at 11:47 a.m., the subcommittee was adjourned.]

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