Government Contractors Working “At Risk” During a Shutdown: Key Considerations
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...