Here We Go Again – Working Through A Government Shutdown

The government shutdown clock strikes "zero hour" on September 30, and government contractors and federal fund recipients are once again left wondering what will happen. We have been writing these alerts and client updates for years now, and the government is no better at managing its budget. So here we go again.

Why is a shutdown relevant for government contractors? The government will not be able to award new contracts, issue modifications, or exercise options that are dependent on funding that has not been appropriated. Additionally, the government may not be able to administer existing contracts, including for example inspecting and accepting goods, or even making contract payments. Yet, defying all logic, a government shutdown generally does not allow the contractor to stop work unilaterally. Government contractors must continue performance and seek to mitigate the damage.