As a possible state shutdown creeps closer, hundreds of companies that rely on government contracts are preparing pink slips, shifting workloads, delaying projects and rescheduling less critical work.

Highways, bridges and other construction projects are in jeopardy, as are the jobs of workers hired for them.

SRF Consulting, a Plymouth highway engineering firm that has a 30-year history with the Minnesota Department of Transportation, said it will furlough 120 of its 200 employees if the state government shuts down July 1 and cuts off its contracts.

Gov. Mark Dayton and Republicans who control the Legislature remain locked in disagreement over how to solve the state’s $5 billion budget shortfall. On Wednesday, Dayton announced a shutdown plan that would affect a wide array of government services and spending. A judge will review which services should continue during a shutdown.

Minnesota pays about $2.5 billion a year to contractors who design roads and bridges, keep computer systems running and supply a wide array of services from health care to tourism promotion. About 1,600 businesses and nearly 3,900 small and individual contractors work for the state, but their services may not make the cut as essential.

Another $900 million is slated this year for road projects — many now threatened by a shutdown.

That worries companies like SRF, which has three- and five-year state contracts worth $11 million. SRF currently is working on an interchange project at Dresbach, Minn., on Interstate 90 along the Mississippi River.

“MnDot usually is our biggest client. And in this economy we don’t have [extra] work just sitting around,” said SRF Chief Executive Randall Geerdes. “State employees are going to be in a lot of trouble but no one talks about what will happen to the private sector. … I am not optimistic.”

A question of survival

Small companies may have the toughest time if they rely heavily on government work.

“Larger companies with deep enough pockets will get through this,”

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