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Washington shutdown hits UK contractors

Friday, 11 Oct 2013 | 11:07 AM ET
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Hundreds of employees from some of Britain's biggest contractors are temporarily out of work, as a result of the U.S. political stalemate that has led to a partial shutdown of the country's government.

Those hit include aerospace and defense giant BAE Systems, security services specialist G4S, and Serco, which provides personnel services to governments.

In a statement on Thursday, BAE said that approximately 1,200 employees across its intelligence and security and support solutions businesses in the U.S. had been told not to turn up for work.

"Whilst the impact of this action has not yet been material to the group's overall financial performance, some progressive impact to the group's U.S. operations would result from a protracted government shutdown," BAE said in its interim statement for the third quarter of the year.

The federal government has remained partially closed since October 1, with a dispute over President Barack Obama's Affordable Care Act leading to Democrats and Republicans failing to strike a deal on how to fund the government until year-end.

Approximately 800,000 federal workers were sent home without pay at the beginning of October, although the number out of work is now closer to 450,000, after the Pentagon ordered most of its employees back to work this week. Those still locked out include government scientists and economists, and employees of visitor attractions such as museums and national parks.

(Read more: Grand Canyon town slammed by government shutdown)

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Fiona Walters, the chief corporate development officer of G4S Americas, said the shutdown had affected those G4S employees who provide administrative support, such as payroll management and recruitment, rather than essential security services.

"We anticipate no material impact in the short- term, however, should the government shutdown continue, the impact of furloughing non-essential government employees in support roles such as billing and procurement may result in a slow-down of payments and the award of new contracts. There may also be limited impact for certain contracts in our government business where such non-essential support roles such as payroll, scheduling and recruitment are provided as part of wider essential services contracts," Walters told CNBC.

A spokesman for Serco said that a "few hundred" of its 8,500 U.S.-based employees were temporarily out of work as a result of the shutdown, with the "vast majority" of these on regular paid leave.

He added that Serco could not say exactly how many of its employees were not at work, as the number varied day-by-day due to federal decision makers changing their mind as to which workers were "essential".

"We have had a situation where some that weren't required, are now required," he explained.

—By CNBC's Katy Barnato

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