Reflections on 2013, the Year That Nearly Killed One Small Federal IT Firm
When the Federal Government reopened on Oct. 17, the employees at CompuCure knew they would pull through. Susan Walsh/AP
For government contractors, budget stability is one resolution they hope Congress can keep.
Hurricane Katrina nearly killed CompuCure. In the wake of the storm, just three of us remained by Oct. 1, 2005, and the weeks ahead promised to be grim for our New Orleans-based IT services firm -- what was left of it anyway. But we weren’t going to let that damn storm chase us away from our city.
By September 2013, eight long years after Katrina wiped out so many lives and businesses, CompuCure had rebounded sufficiently to make Inc. Magazine’s list of the fastest growing businesses in America. With a talented staff of 30 delivering projects that had achieved national recognition for quality and value, it was tempting to think we’d made it to some sort of safe high ground, economically speaking. But by late September, our president and owner, Angelina Parker, faced another storm, this one political. The federal shutdown nearly took down the business again.
While we had become accustomed to the disruptions that stemmed from continuing resolutions -- the stop-gap budgets lawmakers typically adopted while they continued to disagree over larger spending questions -- those rarely impacted our work at federal sites. Employees would clock in while budgets were frozen and eventually CompuCure would be reimbursed. Our line of credit was more than sufficient to carry on. Interest charges eat away at profitability, but we could keep going, knowing that our people and their families felt secure. Our most valuable resources, our employees, would still be on the job.
But the shutdown was different. It meant lost revenue to CompuCure, not just a delay in getting invoices paid. Disturbing questions emerged, notably: How would we keep our talented employees from moving to other companies less dependent on federal contracts?
Ms. Parker decided we would pay our engineers even if the government closed its doors. Everyone would receive regular compensation the first week and be offered the chance to use vacation and sick leave if it went into a second week. Cash reserves and credit lines were on hand to keep the lights on at least that far.
At 4:50 p.m. on Oct. 1, 2013, we received the first of the stop work orders that we knew would come after Congress adjourned the previous night without a budget. As planned, we kept our employees on the payroll and prepared to close operations at the federal sites. Our staff turned off equipment, locked away supplies and closed the doors. We knew we could hold on for a couple of weeks, but it was not a timeline we wanted to test.
Near the end of week two, we were deeply worried. Even though one of our project teams had been declared “critical” and had excess fiscal 2013 budget funds available to continue working, paying for the rest of the company and 100 percent of their health insurance had generated losses approaching $100,000 in just 10 days. We discussed a companywide furlough, an act that could have far-reaching implications.
When President Obama announced on Oct. 17 that he would sign the short-term budget agreement Congress finally struck, we knew we would pull through. Even better, the two-year budget agreement Congress reached in December averts another shutdown in 2014. But the ground has shifted. Congress’ failure to govern responsibly diminished the sense of security felt by CompuCure’s talented people doing excellent work.
Talent is always in demand, and job insecurity is the best way to lose talent, especially in our competitive job market. That’s a point lawmakers would do well to remember the next time they threaten to shut down the government or bemoan agencies’ difficulty in attracting skilled workers and contractors.
Terry Verigan is vice president of CompuCure. He can be reached at terryverigan@att.net.