Businesses benefit from year-end federal spending

NEW YORK (AP) — Small business owners are hoping to get a boost from so-called 'use-it-or-lose-it' federal spending as the end of the government's fiscal year approaches.

"We are seeing lots of activity and hearing from customers that we haven't heard from in a while, some who we hadn't heard from for a year," says Donna Kulesza, owner of Dulles Case Center. The Dulles, Va., company manufactures cases for weapons, radios, computers, medical equipment and other items.

It's typical for agencies to try to spend money before their fiscal year ends on Sept. 30, according to John Linkous, a security researcher at the technology consulting firm EiQ Networks. Acton, Mass.-based EiQ has federal contractors among its customers, and it also does business with the government.

"That pretty much happens every year. For small to mid-sized companies, it's a sweet season," Linkous says.

Spokesmen for several federal agencies did not immediately respond to requests for comment.

In a year when small firms have been among those hurt by $85 billion in federal budget cuts, any uptick in business is welcome. Small businesses have found their contracts cut and canceled, and they've also found it harder to obtain contracts. Although the budget cuts officially started March 1, many agencies were already cutting spending last summer in anticipation of losing funding.

"I'm hopeful that we're seeing an upward trend.  It may be 'use it or lose it' year-end spending or spending that should have occurred earlier in the year, but we'll take it either way," Kulesza says. She has been hearing from employees at agencies including the Department of Homeland Security, the State Department and the Environmental Protection Agency.

Robert Mander, owner of technical document-writing firm Ryan & Co., is waiting to see if the General Services Administration will approve a contract that has been in limbo for months.

"Depending on how their books look on Sept. 29, they may still decide to cancel it," he says.

Companies that were hit hard by the cuts are particularly anxious to find out if the agencies will be more willing to spend.

"Between now and the end of next month is going to be a pretty critical time," says LaJuanna Russell, owner of Business Management Associates, an Alexandria, Va.-based consulting firm. She has lost $1 million of her $3 million in revenue because of the budget cuts. She has been writing more contract proposals in hopes of winning some new business with the government.

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