Governor’s Directive 24-19 imposes pauses on new service contracts
On December 2, 2024, Washington Governor Jay Inslee announced Directive 24-19, a spending freeze for state agencies under his control due to a budget deficit. This directive imposes restrictions on hiring, services contracts, goods and equipment purchases, and travel. The freeze will remain in effect until it is rescinded by the governor.
While it primarily impacts state operations, private business owners and leaders should note the following potential implications:
Services contracts: The freeze on services contracts does not include contracts, contract amendments, or other agreements that cost less than $10,000. The freeze also does not apply to contracts related to:
- Tax collection or other revenue-generating activities
- Funded exclusively from private or federal funding sources, or
- Approved information technology projects
Goods and equipment purchases: The freeze on goods and equipment purchases does not apply to equipment that costs less than $10,000. The freeze also does not apply to purchases that are:
- Necessary to protect life or public safety
- Necessary to carry out the core functions of the agency
- Funded by private or federal grants
Aldrich Insights
The freeze reflects broader fiscal challenges, which could indicate reduced state spending and delayed projects affecting businesses with government clients. Business should consider the following:
- Financial Planning: Ensure robust cash flow management, especially if reliant on state contracts or projects and reevaluate revenue diversification to mitigate risks from reduced state spending.
- Impact on Economy: Leaders should monitor state revenue forecasts and assess how this might influence the regional economy.
- Engaging with Agencies: Only essential travel is allowed for state employees, potentially reducing the opportunity to interact and collaborate with state agencies at conferences and meetings.