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Small Biz Contractors at Biggest Risk as Shutdown Looms


The potential U.S. government shutdown next week portends bigger risks for small business contractors than past closures because of the confluence of current economic headwinds, including inflation, high interest rates and a tight job market.


The tight job market in many industries, particularly for skilled employees, also means that companies that can't afford to keep paying furloughed workers, or that lack the capacity to repurpose worker roles during a shutdown, may lose those workers to other employers, according to Justin Chiarodo, chair of Blank Rome LLP's government contracts practice group.


According to Chiarodo, a shutdown could lead to an even steeper decline if these enterprises decide not to contract with the government anymore or go out of business entirely.

"Absolutely, that's a risk," Chiarodo said. "The uncertainty precipitated by a handful of political outliers, it's absolutely a business risk and a risk to the industry."

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"Small Biz Contractors at Biggest Risk as Shutdown Looms," by Daniel Wilson was published in Law360 on September 26, 2023.