Unless Congress can put together and pass a funding bill (and it looks increasingly unlikely that it will), the Federal shutdown is slated to begin at 12:01 a.m. on Saturday, December 21. What steps can a Federal contractor take to weather this?
- Determine which of your federal contracts will be affected by the shutdown, and how. Some agencies will be directly affected; some may not be because, for example, they are not funded by appropriated funds. Some work may be excepted or exempt, and thus not subject to the shutdown. In many cases, performance under an already-issued contract may not be impacted where an agency has already obligated funds representing the entire price under a contract or task order before the funding lapse began. However, even if a contractor may continue to perform its work during a lapse period, secondary impacts may affect the contractor’s ability to perform. For example, contractor personnel might not be permitted to access federal facilities because they have been closed; or the agency may determine that it cannot justify paying the Federal employees who would be required to supervise the contractor’s activities, in which case the agency might instruct the contractor to suspend performance.
- Identify any plans that your clients have in place to determine what activities and operations will – and will not – continue in the absence of appropriations. Check your client agency’s websites, check the White House’s postings of Agency Contingency Plans, and talk to your contracting officers. Don’t be shy: Ask the contracting officers if your personnel can continue to work at all and if they can continue to work remotely to overcome site access issues. Ask about specific procedures you should follow to secure worksites, protect GFE, etc.
- Review your existing federal contracts to determine your obligations – upstream and downstream. Hopefully, any direction you receive from your contracting officers will align with contract requirements – but look for any discrepancies and create a written record of your attempts to get clarification/direction. Determine whether you will need to issue stop work orders, furlough employees, or negotiate new payment terms or delivery dates with subcontractors and vendors.
- Prepare to submit and support a Request for Equitable Adjustment or claim once the shutdown ends. Document everything and maintain records of the shutdown’s impact on performance timelines, direct costs (labor, demobilization, remobilization) and indirect costs (accounting, legal fees, warehouse storage fees).
