Alle-Kiski Valley businesses caught in government shutdown
As the White House and congressional Republicans play chicken with the national economy, Alle-Kiski Valley businesses are feeling the pressure.
The Valley's private industry is heavily comprised of construction, manufacturing and engineering firms, with government contracts accounting for a significant portion of their revenue.
Several local businesses relying on that revenue are finding that, 11 days into the federal government shutdown, some agencies are defaulting on their contracts.
Vere Inc., a New Kensington-based laboratory-equipment manufacturer, holds contracts with a handful of government agencies, including the Department of Defense and the National Institutes of Health.
Owner Gerry Vaerewyck said his company is sitting on $25,000 worth of inventory after the agencies custom-ordered products and defaulted on the payments.
“We put the time and money in,” Vaerewyck said. “We had the products ready and the delivery on schedule, and then we get the calls that they can't check or bill them.
“We fulfilled our end, then they arbitrarily said they're not going to honor the contract.”
Lt. Cmdr. Nate Christiansen, a spokesman for the Department of Defense, did not respond to an email requesting comment.
An automated message at the National Institutes of Health said staff “can only handle inquiries regarding patient care” during the shutdown. “All other callers should call back after appropriations are enacted.”
Vaerewyck said he can't sell the products to anyone else because they're custom-designed for those agencies. Vere makes laser research equipment that's uniquely tailored to client demands, he said.
Vaerewyck, a West Deer supervisor, expects the government to pay when the shutdown is over, but said his business is suffering in the meantime.
“We need that money just to cover our monthly overhead and it's going to be tight,” Vaerewyck said. “Even if (the government) opened tomorrow, we still probably wouldn't get paid for another month.”
Another New Kensington business owner expecting pay delays is Peggy Carpenter of CP Environmental Group Inc.
An environmental consulting firm, CP's sole government client is the Army Reserve's 99th Regional Support Command. Carpenter wouldn't say what her firm does for the unit, which has a presence throughout Western Pennsylvania, but said it's been deemed an “essential service.”
Carpenter said that means they'll get paid through the shutdown, but the speed of receiving those payments is bound to change.
CP has successfully submitted 15-day expedited payment requests from the Department of Defense after each invoice in the past two years.
Carpenter said with more furloughed government workers, the agency likely won't have the manpower to fulfill the requests promptly. She is expecting payment at the end of the 30-day allowance period.
“Fifteen days may not sound like much,” she said, “but for small business, cash flow is king. It's essential to survival.”
Jeff Stahl, general manager of the Clarion Hotel along Tarentum Bridge Road in New Kensington, also works with the Army Reserve and has felt the shutdown's effects.
The hotel has sheltered the 340th Engineer Co. for nearby training sessions on a monthly basis in recent years.
The 340th accounts for about $1,000 of the Clarion's monthly revenue. The hotel won't see that $1,000 in October, said Stahl, who was told cutbacks are preventing the unit from staying there during the shutdown.
Stahl was unclear whether the Army cut the training altogether, or if the soldiers would commute to the drills. Calls made to Army Reserve spokeswoman Capt. Maryjane Porter went unanswered.
Stahl said he hopes the soldiers return in November.
“It's only a few rooms, but it's a $1,000,” he said. “We're just going to try to fill them. Right now, with the shutdown, they're empty.”
Braden Ashe is a staff writer for Trib Total Media. He can be reached at email@example.com.