Compliance Stuff

  When a federal government shutdown occurs, contractors often face difficult decisions about whether to continue performance on certain contracts. In some cases, contractors may feel pressure — from either operational necessity or the government’s informal requests — to keep working despite funding lapses. However, doing so can expose a contractor to significant financial and legal risks. Below, we outline what it means to perform “at risk” during a shutdown, and key factors government contractors should carefully evaluate before making that decision. What Does Working “At Risk” Mean? A contractor is considered to be working “at risk” when it continues to perform under a government contract without a valid funding obligation in place — meaning there is no appropriated funding legally available to pay for the work being performed. During a government shutdown, this situation often arises because agencies cannot obligate new funds or modify existing contracts. Even if agency person...

Shutdown, again.  This advisory helps contractors manage operations during this period. First Step for Government Contractors and Companies Subject to US Export Controls. Contractors should closely monitor their customer and regulatory agencies’ websites for shutdown guidance, as agencies such as the Department of Defense (DoD), U.S. Department of Justice (DOJ), and others have already issued instructions. [1]  Each agency may have slightly different responses, so staying informed is crucial. Contractors should be particularly mindful of: (1) when contractors must halt work, (2) what work and costs are reimbursable during the shutdown, (3) cost-saving measures that comply with labor laws, and (4) impact of future administrative delays on commercial operations. What Stays Open? Essential Activities That Continue During a Government Shutdown. During a government shutdown, contractors must decide whether to continue work or stop. A shutdown does not automatically suspend contract...