O'Malley BLOG: A Shutdown of Growth

At the Elkridge offices of cybsecurity firm Accuvant, Frank McLallen is in a holding pattern.  As the Accuvant vice president in charge of the firm’s public sector contracting work, he was supposed to be hiring right now – as many as 40 or 50 people over the next nine months.

Today, in the midst of an ongoing government shutdown, those plans are “absolutely on ice,” said McLallen. “We’re not going to be bringing people on board into the unknown.”

Accuvant provides information security services for a range of customers. Most hail from the private sector, but the company has expanded into federal contracting in the last 18 months, pursuing “the next natural source of growth.”

Amid the fiscal uncertainty, Accuvant won contracts with the Department of Defense, the Defense Information Systems Agency and civilian agencies. But despite the high priority of cybersecurity projects, McLallen said the company’s work fell into three categories after the shutdown — business as usual, potential future casualties of the shutdown and outright cancellations of projects.

“We’ve had some work stoppage,” McLallen said. “We had one contract flat-out cancelled.” As a result, instead of expanding, McLallen’s group is now heading in a different direction — long-term growth has become short-term contraction.

McLallen has already shifted eight of his staffers off mothballed federal projects and on to active private sector work. Another six to eight could follow soon.

While Accuvant’s commercial workload is helping the company weather the shutdown, shifting resources away from federal work will have long-lasting effects for both Accuvant and the government.

McLallen said sequestration and budgetary uncertainty has made agencies less likely to deploy new technology or update and fix existing programs unless the need is absolutely critical. The shutdown will compound those issues and  the agencies Accuvant works for will lose out on the expertise and experience as would-be contractors shift to other work due to the disruption of the shutdown.

“The people we may have earmarked as key personnel and our delivery teams could be affected,” McLallen said. “This is not a positive thing for us by any stretch. I’m seeing the shutdown in my community, in the folks sent home from work. For us, it’s a shutdown of growth. We’re limited now at a time that should be a ramp-up period. And that’s very frustrating.”

Nick Sohr, Managing Editor for MDBizNews contributed to this story.

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