How one small firm survived the government shutdown
With 50 percent of its projects being public sector work, find out how an architectural firm in Golden, Colorado, weathered the recent shutdown.
The recent federal government shutdown cost $11 billion and negatively impacted thousands of Americans, including Liz Hallas, AIA, and her firm Anderson Hallas Architects in Golden, Colorado. With a healthy chunk of the firm committed to public sector federal work, a shutdown meant half her projects came to a grinding halt for 35 days. Fortunately, the reopening should mean a return to business as usual, but her story details exactly how the shutdown affected the AEC industry and architects in ways big and small.
Working on federal projects must’ve seemed like a stable way to do business at one point. Is there any desire to diversify in the wake of all this uncertainty?
Liz Hallas: Fifty percent of our work is public sector work for the General Services Administration and National Park Service. We’re really proud of being a part of the stewardship of our public lands and buildings; that is primary to who we are as a firm. In any architectural firm, there are some market sectors that are riskier than others. Previously, we thought that the federal government was fairly stable, but this has us thinking twice.
After the Great Recession, we try not to exceed 50 percent of our work being in any one particular market, so we do have inherent diversification. That served us well when we needed to pivot staff members to other projects temporarily. They’re still public sector projects, but local in nature: schools, libraries, courthouses, and the like.
How exactly did the shutdown affect you and your firm?
Hallas: We’ve weathered shutdowns before, but those were of a shorter duration. As each week went by, it caused more and more uncertainty and anxiety within our team.
We have about 30 federal projects in various phases of design. During the first few weeks, we tried to keep our projects moving, thinking it would end “any day now.” To be honest, we’re fortunate that we didn’t have to make any hard decisions about staffing. Had it continued another week, we would have been faced with that difficult reality.
What’s especially important, and difficult to measure, is what I call the “exponential ripple effect.” We’re only one small company out in the west, but there are so many people that were affected. From the small hotel owners who suffered when we had to cancel travel for site visits, to the vendors and suppliers. It’s important to keep in mind that we’re all part of a bigger ecosystem, and so many workers and business owners felt the impact of this shutdown.
What happens now, in the immediate aftermath of the shutdown?
Hallas: It’s been a challenge in terms of redirecting staff. The next few weeks are going to be very busy, as 30 projects come back to life all at once. All communication suddenly resumes; site visits have to be rescheduled. But crazy busy is a good thing at this point.
"These are uncertain times. Expect the best, but plan for the worst." - Liz Hallas, AIA
We have several projects that are very critical schedule-wise. For example, Sperry Chalet in Glacier National Park has an extremely short construction season due to the snow, so all of those deadlines need to be maintained in order for construction to be completed this summer. We have other projects with permits from different agencies that are expiring. Each one of our projects has its own unique needs. We’ve tried to keep a mindset of, “What does the project need, what does the client need, and how can we best facilitate that despite the internal stress to our firm?”
What would another shutdown—possibly in a few weeks—mean for you and similar small businesses?
Hallas: If another shutdown comes so soon after this one, it would be very difficult. Our first quarter budget projections have taken a hit. Cash flow is affected, along with work plans and internal staffing. As the prime firm on most of our federal projects, we typically have no fewer than 20 subcontracting firms of various disciplines working under us. It becomes very challenging, as a small business, to manage all the invoicing with schedules stopping and starting.
What advice would you give firms or contractors who were affected and need to prepare for future shutdowns?
Hallas: One thing we’ve learned is the value of having tools in place to monitor your workflow and financials. We are lucky that we have good reporting and good data, so we were monitoring hours and billings weekly. Every Monday, we’d meet, reevaluate, and plan for the work week ahead.
Also, try to look at things from the client’s perspective. Nobody chose to be in this situation; for our client’s project managers, we would ask ourselves, “How can we make their job easier?” That way, when the government did reopen, we were ready with status updates so they could quickly get up to speed and projects could get back on track.
Another tip is communicating with your team, both internally with staff and externally with key subcontractors. We wanted to be fully aware of how this was impacting each firm. We also reached out to other stakeholders of our projects, whether they were reviewing agencies outside of the federal government or nonprofit entities, to offer our perspective, hear theirs, and coordinate as best we could to keep projects moving forward.
We also believe in the power of advocacy. We reached out to our elected officials and we initiated conversations with AIA, the National Trust for Historic Preservation, the US Green Building Council, and the American Council of Engineering Companies, all to help amplify the need for the government to reopen.
Lastly, and most importantly, we maintained a positive outlook. These are uncertain times. Expect the best, but plan for the worst.
More resources for small firms can be found through AIA's Small Firm Exchange, including a business plan template and the Small Firm Compensation Report; architects of all firm sizes can also make their voices heard via the Architect Action Center.
Steve Cimino is a Los Angeles-based writer and editor with a focus on architecture and design.
Anderson Hallas Architects