Identifacation and analysis of the impact government shutdowns have on small and socially disadvantaged businesses and how to ameliorate them

Abstract

This study explores ways in which small and socially disadvantaged businesses performing government contracts are affected during government shutdowns. The purpose of this qualitative exploratory study was to ascertain the impact on small and socially disadvantaged businesses performing government contracts are affected when the government shuts down for a lack of timely legislative action to appropriate new annual funding. Data were gathered from semi-structured interviews of small business owners impacted by government shutdowns. This study examined the impact of government shutdowns through both policy theory and the legal framework of procurement law and appropriations law.The major finding of this exploratory study confirms the fact that small and socially disadvantaged businesses experience significant hardships during a government shutdown. More than half of the respondents that participated in the study had experienced cash flow and liquidity problems during a government shutdown, and almost 100% of those said that those problems were either severe or moderate, calling into question their company's continued solvency, and making it necessary for about half of them to furlough or terminate employees.Progress towards the congressional goal of better integrating socially disadvantaged businesses into the mainstream national economy to improve equitable wealth distribution was harmed by government shutdowns. Study findings support further research to quantify the effect of government shutdowns to make informed policy decisions to mitigate damage to small and socially disadvantaged businesses.