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Firms call Washington 'an inconsistent business partner' as shutdown looms

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U.S. Capitol
U.S. Capitol - (NJBIZ File)

John Dewey isn't furloughing any of his 31 employees at Dewey Electronics Corp., and he won't be closing the doors of the Oakland-based defense contracting business if the federal government shuts down at midnight, as expected.

But that's not to say he's taking it lightly.

"I don't think the U.S. government is going away," said Dewey, the company's CEO. "But they sure are working hard to become an inconsistent business partner."

Dewey's firm, which manufacturers power generators and systems for the military, is among scores of New Jersey businesses whose contracts may be harmed by the looming government shutdown. That's the expectation if Democrats and Republicans in Congress cannot agree on a spending bill today, a crisis that would be the latest political standoff in recent years to shake the confidence of businesses and the public.

Henry Savelli, a Trenton-based contracting consultant, said the shutdown could touch businesses across a range of industries, from construction and transportation to defense and Hurricane Sandy relief work. He pointed especially to the U.S. General Services Administration, which handles billions of dollars in procurement annually is support of other federal agencies, and can take four to six months to process bids, he said.

"Anything that's in the pipeline, those businesses in New Jersey that are waiting for a contract from the federal government — that will be delayed," said Savelli, owner of Henry Savelli & Associates.

Patrick Guidotti, of Robbinsville-based PJG Consulting, said the shutdown looms especially large for defense contractors and firms of all types that supply services to installations such as the Joint Base McGuire-Dix Lakehurst.

"They're going to be impacted," Guidotti said. "They're working off contracts and there isn't going to be any money to pay them … I don't see how they're going to get around that, because they're only going to be providing money for essentials."

The federal government has not shut down since 1995, though fiscal brinkmanship on Capitol Hill has become increasingly common in recent years. For Dewey, episodes like a near-shutdown in 2011 and the across-the-board spending cuts known as sequestration have created a pattern of uncertainty.

"There have been these white-knuckle conflicts around every budgeting cycle, so it's been really hard to do business," Dewey said. "Every time we kind of get a program going or a research and development effort going, these things crop up and it kills progress."

To compensate, Dewey has moved to do more business directly with foreign militaries, he said. It's become a better option when the government at home and other businesses are reluctant to start the research and development projects that require Dewey's services.

"Everyone is just trying to keep their doors open in a really chaotic marketplace," he said.

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Joshua Burd

Joshua Burd

Josh Burd covers real estate, economic development and sports and entertainment. Before joining NJBIZ in 2011, he spent four years as a metro reporter in Central Jersey. His email is joshb@njbiz.com and he is @JoshBurdNJ on Twitter.

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