NASA Contractors Implement Prolonged Shutdown Contingencies
Keith’s note: Below is an internal memo sent to employees of ZIN Technologies, a contractor at NASA GRC. Rumor has it that there will be a complete closure at ZIN in mid-February if the government shutdown persists.
“This memo is to advise all ZIN personnel of the fact that due to the Government shutdown of NASA, ZIN is currently not being paid for work you are performing. As a result, we must address our cash flow and take the following temporary actions. These actions are effective beginning Sunday January 13, 2019 and will first impact your paycheck dated February 5, 2019. Your paycheck for January 22, 2019 will not be effected.”
Full memo below:
From: Mynchenberg, Gary W.
Sent: Friday, January 11, 2019 3:59 PM
To: ZINTECH-ALL DL ; Elvis3 ; MOI Alabama
Subject: Impact of Government Shutdown and your compensation
Importance: High
To All
Please be sure to carefully read the attached memo and advise as to any questions, comments or concerns to those identified at the end of the attachment.
Or – simply bounce back your thoughts to me.
I truly regret the action but it is considered necessary given an anticipation of a prolonged government shutdown and the need to stay cash solvent as a company.
Gary
Gary W Mynchenberg
Chief Financial Officer
ZIN Technologies, Inc.
6745 Engle Road
Middleburg Heights, Ohio 44130
This memo is to advise all ZIN personnel of the fact that due to the Government shutdown of NASA, ZIN is currently not being paid for work you are performing. As a result, we must address our cash flow and take the following temporary actions. These actions are effective beginning Sunday January 13, 2019 and will first impact your paycheck dated February 5, 2019. Your paycheck for January 22, 2019 will not be effected.
Exempt Personnel – While we encourage each of you to continue working your full work schedule, we wish to advise you that ZIN will pay a maximum of 24 hours per week and defer payment on the balance of hours worked for as long as the shutdown continues.
Non Exempt Personnel – ZIN will pay non-exempt personnel for all hours worked during this period and normal timesheet policy and procedures apply.
If you are working your customer funded project, a task code entitled FURLOUGH will be established to allow you to charge your project and identify those hours for which you will not be paid as an adjustment against those hours worked that will be paid on a deferred basis. Once the shutdown ends, the FURLOUGH charged hours will then be reversed against the Project and task code you originally adjusted. You can continue to charge your project up to the customer funded amount. Your respective project lead will advise you of project funding status. For example:
You have worked 40 hours against AERO-006 Project and task 07-03. You would record this as 40 hours against this project and task code. You would next enter a -16 hours adjustment against AERO-006 07-03 and a positive 16 hours against AERO-006 Project and task FURLOUGH. The result will be payment of 24 hours and a bank of 16 FURLOUGH hours to be paid once the government shutdown ends.
If you choose to use leave during this period, you can charge up to a maximum 24 hours in combination with your project charge hours until your leave balance is exhausted. We are establishing a furlough without pay (FWOP) charge code to identify hours of deferred leave time. For example:
You have worked 16 hours against AERO-006 Project and task 07-03 and wish to charge the balance of 24 hours to personal leave. The result would be a positive 16 hours against AERO-006 07-03 and a positive 24 hours against FRINGELABOR Project and task LEAVE. You would then enter a -16 hours adjustment against FRINGELABOR LEAVE and a positive 16 hours against -+FWOP. This entry will be reversed once the government shutdown ends. The result would be payment of 24 hours and a bank of 16 FURLOUGH leave hours to be paid on a deferred basis once the government shutdown ends.
If you typically work with the use of administrative charge codes such as SUPPORT, FACILLABOR or GENAD, you should record you time as worked as positive hours. You would then enter a -16 hours adjustment against your respective administrative charge code and a positive 16 hours against the FWOP code. The result would be payment of 24 hours and a bank of 16 FURLOUGH leave hours to be reversed and paid to you on a deferred basis once the government shutdown ends.
If you normally charge both direct project and administrative charge codes on a weekly basis, further direction will separately be provided.
Finally, if you do not have meaningful project work and have exhausted your leave balance, you should enter time against the LWOP (leave without pay code) and effect a -16 hour adjustment to the LWOP code and place it against the FWOP code.
In all events, all full-time employees are to be reminded that they must account for a minimum of 40 hours each and every week. You help in this matter is most appreciated.
I/we regret taking these actions but find it necessary to implement as a result of the government shutdown and the need to preserve cash flow. I/we will continue to keep you posted on events as they develop – minimally on a weekly basis. Please be advised there will be no disruption of benefits during this time of furlough pay tracking. As such, your timesheet entry for the week beginning January 21, 2019 should be charged to the holiday pay as part of your 24 hour charge for the week.
Please contact myself at [DELETED]; Denise Benning-Ybarra at [DELETED]; Lorraine Kimble at [DELETED] or Brianna Uhl and [DELETED] with any questions, comments or concerns regarding your options and how they affect you and your families.
I suppose that as the years go by anyone working under these rules becomes expert at understanding them.
I read what Keith posted and could not shake my original response: WTF?
Just sad. The only good thing about this is that when contractors starting laying off people (and the political pressure was ratcheted up another notch) is when the second longest shutdown ended. Although, I don’t think DOD was funded during the second longest shutdown so the contractor pressure was greater. It is a shame that I don’t think anyone is around at BLM to publish the unemployment statistics.
Layoffs have already started at some small aerospace companies. I won’t name names here, but there was a small company with a name people would recognize that already let some people go (I saw someone who used to work there post to Twitter that they were let go).
The ripple effects of this shutdown will continue to get worse the longer it drags on because the money spent by the US Government does create jobs in the private sector. Those jobs are just starting to be impacted by the shutdown.
I’m not surprised it hit the smaller companies first. The big aerospace companies have enough non-NASA contracts and financial reserves to weather a bad few months (or more.) If they can, any company with sense would sacrifice profits to keep skilled workers. Those are the people they depend on to win future contracts. Smaller companies often lack the resources to do that.
It’s not just you. I think that company will be lucky if half their employees manage to follow those instructions. But I’ve got a good idea of more or less what they’re trying to do.
The part you’re missing is that NASA (and other government agencies) expects fairly detailed accounting. The higher the value of the contract, the more detail. I think $5 million is the magic number where it really gets painful. That involves not just how much time someone worked on which contract, but which specific tasks associated with a contract. E.g. writing software is a separate task from testing software, and on a particular day, someone might be expected to put down 3.5 hours to writing software, 3.5 hours to testing software and 1.0 hours to writing the test report. That makes for a complicated accounting system, and one that’s usually computerized. And that means it can be inflexible.
In this case, the company has people working full time on NASA contracts. They apparently think they can send NASA a bill once the government reopens and get the money to cover those salaries. That may or may not be optimistic, depending on the details of the contracts. They also seem to think they can get by, at least for a while, paying employees 60% time and giving them IOUs for the remaining 40%. Again, I’m not sure why, but that’s what the memo says. Personally, that might be good for the employees; if it were me, I’d prefer that to a 0%-100% split.
But it sounds like their accounting system and software aren’t set up to handle a situation like that. And it’s almost certainly too complicated to make temporary changes. So someone, someone to clever for his own good, came up with a way to trick the system into doing what they want. Bill the 40 hours you work to the appropriate contracts and tasks. Then bill _negative_ 16 hours to the various tasks on those contracts. Then bill an extra 16 hours to a new task called “FURLOUGH” (adding tasks is usually relatively easy.) I guess that makes the system cut paychecks for 24 hours while still tracking the true time worked on each task (necessary for the eventual bill to NASA.) It’s an insanely convoluted way to force a complex accounting system to do something it was never designed to deal with.
The bit about leave and how to bill vacation time is something I don’t even want to think about. It’s even worse. But the money associate with leave comes from overhead and benefits on contracts, and they may need to track which contract. And, by the way, all of this gets more convoluted if a company contracts with multiple federal agencies, with state or local governments, or with other private companies. They all have different rules and the accounting system has to satisfy all of them…