What the Shutdown Means for Shared Services

Though four of the government’s five biggest shared services providers are shuttered under the partial shutdown, they continue to run common systems like payroll using fees from customer agencies.

But the situation could change depending on how long the shutdown lasts.

Organizations across government rely on the General Services Administration, Defense, Agriculture, Treasury and Interior departments to manage common systems for like payroll and property management. Of those groups, only the Pentagon is unaffected by the current funding lapse.

But even as unfunded departments close their doors, the services they operate will remain available, at least to those that can pay for them.

Operations don’t completely grind to a halt when an agency stops receiving appropriations; programs may be allowed to continue during funding lapses for numerous reasons. In most cases, shared services offices stay open because they’re funded by fee-for-service agreements, not Congress, according to Professional Services Council Executive Vice President and Counsel Alan Chvotkin.

Employees within the Interior Business Center—which manages human resources, payroll and other operations for multiple agencies—are considered exempt from shutdown measures because their “compensation is financed by other than annual appropriations,” according to the department’s contingency plan. Portions of the shared services staff at GSA and the Agriculture Department are also exempted, and the offices can continue to operate using payments they collect from customer agencies.

“There are still funds available from prior payments … [so] they will operate as long as they have money available,” Chvotkin told Nextgov. “They’re not subject to the new appropriations.”

And because funded agencies can continue paying for services through the partial shutdown, those offices will have a steady stream of payments to keep them afloat as the shutdown drags on, according to Chvotkin.

“Their window is open for anyone who has money to come,” he said.

But unfunded agencies won’t be able to access for those services once their coffers run dry, which could potentially disrupt operations until appropriations become available. For example, Chvotkin said employees could possibly see paychecks delayed as newly funded agencies reboot their payroll services.

That said, Chvotkin doesn’t expect the shutdown to have any significant impact on agency shared services but that’s subject to change the longer it drags on.