Introduction
Most eyes and ears are on Capitol Hill Friday as we waited for a spending bill to be approved ahead of midnight tonight, to prevent a government shutdown.
If the government shuts down, it will impact government contractors. In this brief eAlert we discuss what to expect during a shut down and how to prepare to minimize its impact.
Some of What to Expect
- During a shutdown, contracts about to expire cannot be renewed.
- Solicitation and award of new contracts will likely be put on pause.
- Contract options cannot be exercised.
- Modifications of contracts cannot be issued.
- Unless the contracting officer issues a Stop Work Order, funded contracts are expected to be performed.
- Payment of invoices will be delayed.
- Many government employees, including contracting officers, will be furloughed and will not be permitted to use government provided devices such as phones and laptops.
What to Do
- Communicate with your contracting officer; know what you can expect.
- Communicate with your subcontractors: Inform them that in the event of a shutdown payment of invoices may be delayed; if a Stop Work Order is received, immediately communicate it to the subcontractors and ask them to stop performing on the subcontract.
- For primes and subcontractors alike: If a Stop Work Order is issued, read it to understand what is expected of you and note any timelines you need to follow.
- Even if no Stop Work Order is issued but you’ll encounter delays in the contract because of the government shut down, keep track of the reasons for delay.
- Also, for primes and subcontractors: Document, document, document. Document your communications (prime – contracting officer; prime – sub; sub – prime); document your costs, your expenses and the work performed. Make sure your records are accurate.
- Become familiar with contract clauses addressing termination for convenience, government work delay and stop work.
- Have a contingency plan in place if you need to reassign employees to work on other tasks such as commercial contracts.
- Remember, it is important to mitigate increased expenses and document such mitigation if you will ask for any equitable adjustments.
- Keep a paper trail of tasks impacted by possible government system shutdowns. For example, if you’re hiring new employees, complete a hard copy of the I-9 form if E-Verify is down.