Alert – how to handle the government shutdown as a Federal contractor.

Summary of Keypoints

• Situation overview: A partial federal government shutdown has begun, creating uncertainty for federal contractors and requiring immediate contract-by-contract assessment.
• Prime contractor guidance: Contractors should maintain close communication with the Contracting Officer (CO/KO), COR, and COTR; stop work on unfunded contracts; and follow any stop-work orders issued on funded contracts.
• Funded contracts without stop-work orders: Contractors may continue work if feasible, but must stop if access to government sites, personnel, or records is unavailable.
• Subcontractor actions: Subcontractors should coordinate directly with their prime contractors to determine which contracts remain funded and active.
• Operational considerations: Contractors should plan for employee impacts, communicate with subcontractors and staff, monitor cash flow, document shutdown-related costs, and prioritize clear communication throughout the shutdown period.

It’s official, the Government shutdown begins. What does this mean to Federal contractors?
A partial federal shutdown occurred early today. We are all hopeful that the House, Senate and the Executive Office can find common ground sooner rather than later and know this is particularly concerning for our government contracting clients. The question looms large: What should a government contractor do given this event?

For Prime Contracts: maintain contact with the CO/KO, COR and COTR to ensure you are kept abreast of whether and how delivery of your contract will be impacted.

For all unfunded contracts, stop work immediately.

For all funded contracts, stop work if a stop work order is received.

For all funded contracts where no stop work order is received, if you are able to continue work, do so until notified by the contracting officer to stop work. If work is not possible due to inaccessibility of the site, government personnel, or records, stop work.

For Subcontracts: talk with your Prime Contractor to identify which contracts they understand will remain funded.

In all cases, consider:

1. How to handle staff impacted by a shutdown.
2. Communicate the impact to your subcontractors.
3. Consider cash flow requirements and be in touch with your bank as needed.
4. Maintain an accounting of the costs of the shutdown.
   Communication is exceptionally critical during this time of uncertainty with your team members, sub-contract team members, current/new/contingent employees to keep them abreast of how they are impacted

For additional information, please contact Jennifer Eubanks at 703-729-2882 or at jeubanks@euco4u.com.