As the partial government shutdown stretched into its second week, federal agency officials, contractors and sector analysts reacted differently to the effect on contracts, staffing and profitability.
On Oct. 15, 10 days after the Pentagon recalled 90% of 350,000 furloughed workers, the Army Corps of Engineers said that new regulatory office closures will halt permit applications and reviews and preconstruction notices.
The U.S. Nuclear Regulatory Commission's Oct. 10 shutdown would not affect jobs of 300 "essential" workers, including nuclear plant inspectors, but has affected staffing that could delay construction approvals at new reactors in Georgia, South Carolina and Tennessee, says Platt's, which, like ENR, is part of McGraw Hill Financial.
Also halted is non-emergency reactor licensing, license renewal amendments, review of design certifications and regulatory guidance, said NRC Chairwoman Allison McFarlane.
URS Corp., a long-time federal contractor, said Oct. 10 it had furloughed 3,000 of its 54,000-person staff. "The government shutdown, the continuing effects of sequestration and uncertainty about the federal budget are all having negative impacts on URS and many other government contractors," said H. Thomas Tom Hicks, URS chief financial officer in a company statement.
The firm's stock dropped 1.9% for the week ending Oct. 11 against other E&C firms tracked by Credit Suisse lead analyst Jamie Cook.
Analyst Andrew Wittman of Baird Equity Research says the furlough's duration "is the largest area of uncertainty for 2013 [results]." He says URS, Tetra Tech and AECOM "have the greatest exposure to the federal government as a percentage of revenue in the E&C space," also noting possible impacts at Jacobs, Fluor and CB&I.
Spokespersons for Fluor, CH2M Hill and Bechtel declined to confirm staffing status at U.S. Energy Dept. former nuclear sites, referring questions to DOE.
But a published local report in Augusta, Ga., notes a 1,400-person furlough by contractor Savannah River Remediation at DOE's Savannah Rver Site in Aiken, S.C.
Bechtel National, CH2M Hill, and Babcock & Wilcox make up the contractor joint venture. It had laid off 465 workers in September due to anticipated fiscal 2014 budget cuts.
The site's lead contractor, the Fluor-led Savannah River Nuclear Solutions, has done no furloughs so far, but could begin that process when current funding runs out at month's end, says the local report.
Sevenson Environmental CFO Bill McDermott has seen no significant mpacts yet on the firm's federal cleanup jobs, which make up 25% of operations, but he says furloughs of Corps and U.S. Environmental Protection Agency field staff could soon impede project work and progress payments.
"If furloughs continue, Sevenson will eventually be forced to lay off field personnel at government sites," he says. "We are doing our best to manage things so that doesn’t have to happen any sooner than absolutely necessary."
ICF International says it has received stop-work orders from some federal clients, but a spokesman says affected employees are using paid time off and some top executives have agreed to take a 20% pay cut. He says the firm's work for non-US, commercial and state and local clients is not affected.