JOHNSON SPACE CENTER — The shutdown of the federal government could have a devastating impact on local businesses and private contractors, the president of the Bay Area Houston Economic Partnership said Thursday.
In a white paper report on the impact of the federal government shutdown on private industry, Bob Mitchell argued that the longer the shutdown continues, the harder it becomes for private industry in the area to recover.
“The situation is dire,” he said.
The vast majority of the 3,100 federal employees at NASA’s Johnson Space Center have been furloughed.
The more than 11,000 private sector employees who contract with the center also are in danger of being sent home as the respective government contracts dry up, Mitchell said.
About 20 percent of the private employees who contract with the space center are furloughed, Mitchell said. If the shutdown continues, that number could jump to 90 percent by the beginning of November, he said.
“The short-term harm to workers and their families is incalculable,” Mitchell wrote in the white paper.
“The longer-term harm to the companies is just beginning to be understood.”
The shutdown creates a cash-flow problem, particularly for smaller businesses. Companies will have to make drastic decisions about how to sustain furlough costs, which could include layoffs, Mitchell said.
Mitchell said he also was concerned that employees might decide to leave the aerospace industry because of the shutdown, creating a vacuum in talent and institutional knowledge.
He argued for several measures to help private businesses and employees endure the shutdown.
The measures include extending benefits to employees working existing government contracts, assuring companies that contracts can be renegotiated because of the shutdown and allowing procurement teams to return to work to provide long-term funding for existing contracts.
The shutdown is creating economic misery for both federal employees and private contractors who depend on Johnson Space Center, Mitchell said.
Isaac Mensah, a contractor with United Space Alliance who trains astronauts in the use of robotic equipment, said he was staying abreast of new developments in the shutdown and hoping for a swift resolution.
He stressed that he was speaking his mind and that he did not represent the opinions of United Space Alliance.
“It’s difficult, but it’s nothing we can’t recover from,” Mensah said.
However, if the shutdown stretches into the coming weeks, it could lead to problems with scheduling and cause other issues, Mensah said.
“We’re taking it day by day,” he said. “We all want to get back out there and get to work keeping America No. 1 in space.”