How Government Contractors Should Prepare for and Deal with a Shutdown
As Congress continues to grapple with budget deadlines, the possibility of a government shutdown is never far from the minds of federal contractors. Unlike many federal employees, who may be furloughed with back pay authorized by Congress, government contractors often bear the brunt of shutdowns in the form of stopped work, delayed payments, or even contract terminations. With the potential for significant financial and operational impact, contractors should be proactive in both preparing for and managing the effects of a shutdown. 1. Review Your Contracts for Shutdown Implications Every federal contract is different, and the impact of a shutdown depends on the nature of the contract and its funding. Contractors should carefully review: Funding Clauses – Determine whether your contract is fully funded or incrementally funded. Fully funded contracts may continue through a shutdown, while incrementally funded contracts could be halted once funds are exhausted. Stop-Work Clauses ...