Several Spokane-based companies with federal contracts are losing deals and money as the government struggles with sequestration and shutdown.
Tim Boden, who works for a Liberty Lake tech company that sells computer-assisted-design products to defense contractors, said he recently lost a contract.
“They said they wanted to set up a phone call to discuss plans to place an order early next year,” said Boden, director of sales for Translation Technologies.
The next day, the federal shutdown occurred. “And I haven’t heard from them since,” Boden said.
Spokane Industries, which sells fuel removal systems and ground-support equipment used by the Army and Air Force, has lost close to $1 million in sales this year, company President Greg Tenold said. The products sell for around $50,000 each.
Much of that financial loss occurred as the sequestration cuts began earlier this year, he said.
But he’s also seeing other business impacts as some federal customers hold back from end-of-year orders typically made when agencies had money unspent in their operating budgets, Tenold said.
The Air National Guard unit based in Fresno, Calif., for example, planned to evaluate his company’s fuel-removal products with plans to buy during the fourth quarter. But the unit commanders recently changed their minds.
“Everything is just being pushed back,” Tenold said. “People just won’t do any orders when they don’t know what’s happening.”
Ultimately, the biggest effect seen by Spokane Industries is that customers are uncertain about making purchases.
“This management of a crisis every three months creates a drain on the entire economy,” Tenold said.
In another example, the recent shutdown led to six workers with Azar’s Food Services being laid off at the Henry M. Jackson Federal Courthouse in Seattle. The Spokane company won a contract last year to operate the cafeteria there.
Azar’s owner Angela Azar said she tried operating the cafeteria during the shutdown’s first week, with just two workers.
“We were doing just $250 (of business) per day,” Azar said. This week the cafeteria has been shut down while Azar waits for Congress to act.
Transtector Systems, based in Hayden, has seen a similar delay in orders, even though its orders haven’t been significantly reduced.
Many of its federal contracts are with the military or with defense contractors. Its main line of products for that group are high-end electronics that protect critical communications and power components from electrical surges.
“Most of our defense projects are long-term,” said Transtector marketing director Linda Johnson. “What the sequester and shutdown do is just lengthen the whole process. Everything gets pushed out longer in time.”
She added, “The result is we have to plan for that inconvenience. Things take longer than they used to.”