Federal government clients, generally, are some of the most stable and sought after for any promotional products firm.
Except when they’re not stable.
As the current federal government shutdown enters its fifth week in late October, promotional products companies with contracts or clients in the public sector are facing delays, uncertainty and disrupted forecasting – and say the effects could linger long after Washington reopens for business.
The impact is both immediate and unpredictable. With contracting officers on furlough and communication channels largely shut down, delivery orders and bid processes have ground to a halt, leaving vendors waiting in silence.
“This isn’t our first rodeo with a government shutdown, but historically, it just delays delivery orders against existing contracts,” says Ben Wood, CEO of supplier ViewSPORT. The company supplies apparel and merchandise to several federal agencies.
Wood explains that the current pause in federal operations affects short-term cash flow, but more importantly, long-term planning. “Because of the scale of our business, we usually get some sight lines into what the government intends to order, but obviously they’re not making commitments,” he says. “There are no contracting officers in place to give us sight lines of what the future holds. They don’t have a sense of what their budgets are going to be.”
Ben Wood
CEO, ViewSPORT
The result is a ripple effect. Requests for quotation (RFQs) that were in progress before the shutdown have been canceled or stalled, forcing prime contractors and manufacturers to start the process over again once operations resume.
“What I’ve observed recently is that RFQs that were in place – let’s say June, July, August, September – for particular items are now going to have to be resolicited because they’ve been canceled,” Wood says. “That’s going to create even more delay.”
Even if the shutdown ends soon, companies say the lag in production, contracting and payment will push some recovery into next year. “If the government were to open in two weeks, there’s still going to be a deficit in Q1 of ’26,” Wood says. “Closure of the government directly correlates with decreased production from a manufacturing perspective.”
Different This Time?
Already, the current funding gap is the second-longest in American history, edging toward the record 35-day shutdown in 2018-19.
At supplier Unionwear (PPAI 111926, Standard Base), where about half of the business comes from federal clients, CEO Mitch Cahn says the company has learned from past shutdowns not to panic – but that doesn’t make it easier. He recalls that, previously, orders surged following a shutdown as clients re-stocked their inventory. “We also didn’t get paid for a long time,” he says.
For now, Unionwear hasn’t felt a major slowdown, partly because the company’s production calendar naturally includes quieter months later in the year. “It’s not affecting us as much,” Cahn says. “If it drags on into February or March, then we start to get a little antsy.”
Mitch Cahn
President, Unionwear
Still, he describes a mix of resignation and patience. “People have gotten through it; no one’s really talking much about it,” he says. “People are way more concerned about the tariff situation and how unpredictable that side of the business is than they are about the government shutdown.”
Wood sees a more immediate operational challenge. “There’s nothing you really can do,” he says. “You’re not really empowered or have a voice. You just have to accept the reality of the situation, and then you respond accordingly, based on the decision tree of what the government decides to do.”
The stakes could rise quickly if the stalemate continues. “The worst-case scenario would be an extended shutdown, which has effect on the awarded contracts with prime contractors,” Wood explains. “If it extends beyond the contracting year, then it’s going to affect the dollars which were assigned to that contract.”
An Effect On Industry Advocacy
Even PPAI has felt the ripple. The Association has been forced to cancel in-person advocacy activities planned for early November, part of its ongoing government relations initiatives, due to the closure.
In a first-time extension of the spring Legislative Education & Action Day, which this year welcomed more than 70 industry attendees to meet with the offices of representatives and senators, another D.C. event was scheduled for Nov. 5.
Joining PPAI leaders and officials from Association lobbying firm Thorn Run Partners, 12 principles and executives from some of promo’s largest employers were set to meet with federal offices, such as the Secretary of Commerce and the U.S. Trade Representative, to share the industry’s stance on important issues, from tariffs and trade to independent contractors’ status.
Companies with more than $2 billion in industry revenues were represented by the volunteer group. However, as the date grew closer, it became impossible to guarantee that those offices would be able to accept meetings.
The event will be rescheduled once the shutdown reaches a conclusion.
