Federal contractors, agencies consider shutdowns, furloughs as funding dispute drags on

Joe L. Evins Federal Building

The U.S. Department of Energy will soon start shutting down nonessential operations, resulting in employee and contractor furloughs, unless Congress passes a spending bill. Pictured above is DOE’s Oak Ridge Office at the Joe L. Evins Federal Building.

Furloughs possible at DOE, UCOR, other federal contractors; some SAIC employees on leave

The government shutdown is now in its second week, and the U.S. Department of Energy could start shutting down nonessential operations soon—resulting in employee and contractor furloughs—unless Congress quickly approves a spending bill, officials said Tuesday.

Federal contractors with operations in Oak Ridge are also considering possible shutdowns and furloughs because congressional Democrats and Republicans have failed to reach an agreement on a spending bill to keep the government operating in the fiscal year that began Oct. 1.

In a Tuesday message to employees, UCOR President Leo Sain said the company, the government’s cleanup contractor in Oak Ridge, has not been told to shut down yet.

“However, since Congress has not passed an appropriations act, we are preparing for that possibility,” Sain said. “If we receive direction to shut down, unfortunately, it would involve a furlough affecting large numbers of UCOR and staff augmentation personnel. Only UCOR and staff augmentation personnel necessary to protect human health and property, as determined by UCOR and DOE, will be retained.”

Furloughed employees would not be paid until the furlough period ends, Sain said.

“At this time, we do not know if furloughs will be enacted at UCOR, and if so, how long they will last,” Sain said. “But keep in mind a furlough is not a layoff, and we intend to call back all personnel after the shutdown is over.”

The middle of October appears to be a crucial decision point for at least some federal contractors and agencies. That’s also near the Oct. 17 deadline when Congress and President Barack Obama are expected to try to resolve a second battle over whether to raise the nation’s debt limit.

DOE said it can continue operating for a “short period of time” after Sept. 30, the end of the last fiscal year. But the lapse in federal appropriations has had serious impacts on the department’s ability to carry out its mission, a statement said.

It said the administration believes Congress can resolve the funding dispute.

The federal fiscal feud primarily centers on whether to include in a spending bill a one-year delay in the individual mandate in the Affordable Care Act, which critics have labeled “Obamacare.” The Republican-controlled House has approved the delay, along with a repeal of a medical device tax meant to help pay for the law, while the Senate, which is controlled by Democrats, has pushed for a clean spending bill that makes no changes to the controversial health care law. Obama also wants a clean spending bill.

“If a resolution is not achieved in the near term, the department will be forced to take further action to shut down nonessential operations, resulting in employee and contractor furloughs,” DOE said. “It is our hope that this will ultimately be unnecessary and that Congress will come to a quick resolution.”

USEC, a company that supplies enriched uranium fuel for commercial nuclear power plants and has operations in Oak Ridge and Piketon, Ohio, said it is considering the possibility of having to furlough some employees if the federal shutdown continues, although it’s too early to say what will happen—or whether Oak Ridge employees could be affected.

“No decisions have been made,” USEC spokesman Paul Jacobson said in a brief phone interview Tuesday. “No plans are in place along those lines yet.”

He said the company, which has 426 jobs in Tennessee, has a range of options to consider later this month and doesn’t want to create unnecessary concerns prior to that assessment.

USEC has manufacturing and technology operations in Oak Ridge, including a joint company with Babcock and Wilcox Co. that manufactures centrifuges for the American Centrifuge program.

It’s part of a cooperative agreement between USEC and DOE to research, develop, and demonstrate next-generation uranium enrichment technology. The total investment will be up to $350 million, with DOE providing 80 percent and USEC 20 percent. So far, the government has made available $227 of its $280 million share, USEC said in a statement Tuesday.

It said the remaining government money for the final three months of the program is subject to available funding. USEC said it is working with Congress and the Obama administration to obtain money through Dec. 31, and executives believe $48 million in funding would be sufficient.

The company said it has some leftover cost share money to fund the project through Oct. 15.

“However, failure to pass a government spending bill and a government shutdown lasting more than two weeks beyond the end of the government fiscal year 2013 (Sept. 30, 2013) have the potential to severely impact the program,” USEC said. “Additional government funding is needed to meet the government’s cost share obligation and complete the RD&D program. The longer a government shutdown situation continues, the more difficult it will become to maintain operations.”

SAIC, another government contractor with operations in Oak Ridge, said its employees have been affected by the shutdown.

But the precise number varies each day, SAIC spokeswoman Lauren Darson said.

As of Tuesday, Darson said, the company had about 750 employees who had been placed on administrative leave, which allows their pay and benefits to continue. SAIC also had roughly 250 subcontractor employees affected by the shutdown.

“It is up to those individual companies how to handle these employees,” Darson said. “Please keep in mind that this can change up or down tomorrow.”

SAIC did not immediately have information on how many of those employees on administrative leave work in Oak Ridge.

At UCOR, Sain said employees could use their accrued paid time off, or PTO, during the furlough period. Staff augmentation personnel should request guidance from their employers on their status upon release from UCOR, he said.

He said the company’s human resources department will soon have more information for UCOR employees.

“I hope that there is a quick end to this situation,” Sain said. “In the meantime, I ask you to stay focused on your work and take extra precaution with your safety and the safety of others.”

Representatives at other Oak Ridge organizations and operations were not immediately available for comment or referred questions to the U.S. Department of Energy’s headquarters in Washington, D.C. More information about DOE’s plan if funding lapses is available here.

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