Implications of a government shutdown on Gov't Contractors: How should you proceed?
The biggest elephant in the room right now is "will the gov't shut down on Sept. 30?"
If it does, just remember the following to get through the situation and most importantly get paid after the fact:
The contracting officer is the only person with the authority to tell you that you can work during a shutdown. If you continue to work without the contracting officer’s OK, you risk not getting paid for your work.
Everything you do needs to be documented, period.
There are costs involved in shutting down operations as well as restarting operations, so documentation will be critical if your firm expects to be reimbursed for these costs.
It is also very critical for your firm to understand where your funding comes from, when funds are obligated, and for how long. For example, is it a multi-year funding? If so, the work may be able to continue; but again, according to Federal Acquisition Regulation, the only person who has the authority to answer that question is the contracting officer.
If a contract has been entered into before the budget expires and is fully funded, work should continue unless – and it is a big unless – a government employee is required for the work to be done and that employee is furloughed, or the contractor can’t get access to a facility.
Let me emphasize, your employees should only stop working if they are directed to stop through a stop work order – again issued by the contracting officer.
six actions that contractors need to take or be prepared to take in the event of a shutdown:
- Analyze your current situation – this includes your contracts as well as your company’s financial health
- Plan for multiple possible events – there may be more than one shutdown and offices may open and close during a single shutdown, depending on need
- Document everything!
- Account for everything – similar to document, but it is important to capture your costs of the shutdown if you want to file for reimbursement
- Mitigate when possible
- Communicate before, during and after. Talk to your contracting officer but also your employees
- Promptly seek recoveries – there will be notices so watch for those. Many will be in the first 30 days after the shutdown ends.
Finally, due dates for proposals are not automatically extended during the shutdown. So, if a proposal is due and the government is shutdown, file your proposal.
This is is not the first or last time this will occur, so keep this post as a standard operating procedure for your firm's future reference.
Happy Hunting for the 2015 - 16 fiscal year!
Boston Warwick | www.boston-warwick.com
Boston Warwick provides support and counsel to government contractors on all aspects of government contracting.