Distributors See Little Impact So Far from Government Shutdown, Hope for Quick End

Electrical distributors who’ve developed close supplier relationships with government facilities in and around  Washington, D.C., are seeing little impact thus far from the shutdown of the federal government this week. If the shutdown were to drag on very long, though, that picture might change as projects get delayed and funding for some facilities comes into question.

Direct sales to the government tend to be slow this time of year anyway, said Lawrence Bennett, who handles government sales for Dominion Electric Supply Co., Arlington, Va. “The places where distributors do the bulk of their business now, a lot of government facilities, really don’t have that much money, except for emergencies, at least until January, historically,” he said. “Will this stop that from happening until February or March? I don’t know.”

Sales to contractors working on government jobsites may be another matter, he said. “Contractors who maybe can’t get in to a place to do work, due to the fact that at there are less people to let them in to work, or maybe the engineer in charge of a project got furloughed, that’s going on, too.”

The impact of the shutdown really just complicated an already frustrating situation, Bennett said. “What hurts is we already had the sequestration, and now we run into this. People were unhappy anyway because maybe they were laid off a day a week already, and now this just makes it harder.”

Over at the Beltsville, Md., branch of Shepherd Electric Supply, where Branch Manager Jeff Ring also oversees the company’s dedicated government sales team, they’ve watched purchasing on their General Services Administration (GSA) contract, which always slows at this point in the federal fiscal year, come to a halt as most of the personnel handling the contracts have been furloughed. Ring saw no reason to be concerned about losing sales over the long term or getting paid for what they have delivered already.

“We have no concerns about getting paid. We have the contracts in place, and we know they’re the best-paying customer out there,” Ring said. “We know the sales will still be there. If the shutdown continues for a month and they get back to work in November, because of the business we’re in they’ll still need that product, so we will just see a heavier load come November-December.”

There was some disappointment, however, that a trade show focused on sustainability and lighting efficiency for which the Shepherd team has prepared for weeks — printing brochures, preparing displays, bringing in factory reps — was cancelled due to the government shutdown.

Shepherd’s business mix is heavily contractor oriented, and Ring said the question of which jobs are still underway and can accept deliveries and which can’t has become a constant routine for his team. “They know, everything we do now, it’s a phone call to make sure the base we’re going to is accepting delivery. Some are, and some aren’t.” His hope is that the shutdown will end before the backlog of material awaiting delivery piles up too deep in the warehouse.

In the meantime, Shepherd’s government sales team is using the downtime to do some cleanup. “Our GSA contract is a monster, so right now we’re spending time getting things cleaned up, doing all the things you just can’t get to during a regular work day,” he said. “It kind of feels like those last two weeks after Christmas when you’re trying to clean your desk and do all the things you need to do for the new year because everyone’s not working.”

One of the electrical industry’s top lobbyists, Kyle Pitsor, vice president of government relations for the National Electrical Manufacturers Association (NEMA), Arlington, Va., did all he could to encourage Congress to keep the government doors open and the lights on. NEMA joined with 251 other organizations including associations from just about every conceivable line of business and chambers of commerce at the national, state and local levels, in sending a letter to Congressional leaders urging them “to pass a Continuing Resolution to ensure uninterrupted funding of the federal government into the next fiscal year and to act expeditiously to raise the nation’s debt limit.”

Now that the shutdown has been allowed to happen, Pitsor said we may be looking at a two-week ordeal. He’s hopeful that the hard deadline of Oct. 17, when the government will reach its debt limit, will bring the impass to an end.

“The options are not exactly all that clear, how this is going to get resolved, given the stance of both parties pointing at each other,” Pitsor said. “But it needs to be resolved on or before Oct. 17 when the debt ceiling hits. If there is a forcing mechanism it might be the reaction in the marketplace if this goes on much longer.”

Pitsor’s government relations department handles NEMA’s interactions with the Department of Energy on efficiency standards and the Environmental Protection Agency on the EnergyStar compact fluorescent lamp (CFL) program standards. All that work, including efficiency standards for metal-halide fixtures, HID lamps and general-service fluorescent lamps, are on hold, Pitsor said.

One of the last bills passed by both houses of Congress before the shutdown was a win for Pitsor and NEMA. It was a bill to continue operation of the U.S. helium reserve in Texas until it can be phased out as private sources come online, a bill for which NEMA lobbied vigorously as helium is widely used in welding in all kinds of manufacturing and very heavily used by MRI and other medical devices.