Just in Case There’s Another Government Shutdown…

Government shutdowns hardly ever catch us by surprise. As a responsible government contractor, you should have a plan and know your options.

Here are some tips to help you prepare:

1. Know what each of your contracts say about a Stop Work Order. Being aware ahead of time might prevent you from making the mistake of working and not getting paid.
2. Have a discussion with your contracting officer, or prime contractor if performing as a subcontractor, about how a government shutdown will affect your contract. Don’t assume impacts are obvious.
3. Develop a plan for your affected employees. Early communication with your team will help reassure them that you will do everything in your power to lessen negative effects.

While the Federal Acquisition Regulation does not specifically address the contractor’s right and obligations in the event of a government shutdown, the clauses in individual contracts can help determine an appropriate course of action. While some contracting officers will issue a Stop Work Order, in accordance with 52.242-15, others will not. If funding is available and no Stop Work Order has been issued, then performance can technically continue. Problems arise when access to facilities, people or tools and data is denied as a result of the shutdown and performance is not possible. This is considered a “constructive Stop Work Order” and costs should still be identified and collected within a unique charge number just as if a formal Stop Work Order had been issued. In addition, review the “Changes” clause in your contract and the “Government Delay of Work” clause.

The recoverability of costs related to the government shutdown will depend on circumstances in each individual contract. One thing is certain; in order to recover costs, you will need thorough documentation to establish that the increased cost was caused by the shutdown. This documentation should show what actions were taken, why that action was in the government’s best interest and exactly how much that action cost.

If you have any questions regarding best practices on managing the impact of a government shutdown to your company, please contact marketing@bmss.com for assistance.