With so much on Congress’ plate when its members come back from recess, fears of another government shutdown loom once again. And with statements from key administration officials, it seems this year’s budget debate will be even more fierce than years past.

To help contractors understand and prepare, David Berteau, John Cooney, and Alan Chvotkin spoke during the Professional Services Council webinar entitled “Government Shutdown? Debt Ceiling Breach? Are You Prepared?” 

The biggest question on contractors’ minds is “will I be affected.” To answer this question, Cooney and Chvotkin explain the effects of the shutdown. According to Cooney, funding may remain available if:

  • It is funded by multi-year money that is obligated already.
  • Statutes authorize the continuation of your program — an example of this would be those that are essential to the protection of health and property.
  • Your program is needed for constitutional powers of the president and/or Congress to be executed.
  • The tasks are authorized by necessary implication from specific duties.
  • Tasks are needed to terminate operations orderly.

If you receive a stop work order, Chvotkin explained, be sure you stop all work, including the work of subcontractors and vendors, identify the effect this will have on the program, mitigate costs in any way you can, and document everything that needed to change to stop working — these could help you receive recoveries later.

To finish the webinar, Chvotkin brought up the impact of not increasing the debt ceiling, as well. The debt ceiling, Chvotkin explained, is the amount of money the government can borrow. If it is breached, the government will be restricted in funds available to pay valid invoices to contractors. The best course of action, Chvotkin said, was to ensure all invoices are turned in as soon as possible, before such a breach, and to consider accelerating or deferring invoices if the debt ceiling is not increased.

Although there has never been a government shutdown while a single party held the White House and Congress, as Berteau noted, there is no guarantee that this year will follow with the tradition. Because of this, it is essential that all contractors plan for setbacks.

The most important piece of advice given by all three PSC affiliates was to talk with your contracting officer before anything happens. If a government shutdown is implemented, any federal employees will be unable to use government issued devices, and would be unable to answer your questions.