What is the story about?
What's Happening?
The Professional Services Council (PSC) is advising government contracting companies to prepare for potential government shutdowns by securing cash flow and identifying agency contacts. The PSC held a briefing on September 2, urging companies to ensure they have sufficient cash to continue operations and pay employees. Shutdowns disrupt the reliable payment model that these companies depend on, and PSC President Stephanie Kostro emphasized the importance of maintaining communication with financial institutions. Historically, shutdowns have occurred frequently, with four full shutdowns since 1995 and numerous continuing resolutions enacted. Companies are advised to document time during shutdowns for reimbursement applications once operations resume.
Why It's Important?
Government shutdowns can significantly impact contractors who rely on federal payments, affecting their cash flow and operational stability. The PSC's guidance is crucial for these companies to navigate potential disruptions and maintain business continuity. Shutdowns can lead to workforce reductions and delayed payments, creating financial strain. Contractors must be prepared to manage these challenges and ensure they can recover costs post-shutdown. The advice to maintain communication with financial partners is vital for sustaining operations during uncertain times.
What's Next?
Companies are advised to identify government contacts who will be available during a shutdown to facilitate communication and ensure deliverables are managed. Agencies typically provide guidance for cost recovery post-shutdown, and contractors have a 30-day window to apply for reimbursement. The PSC is monitoring the situation closely, especially regarding workforce reductions and agency availability. Companies must remain vigilant and proactive in their preparations to mitigate the impact of potential shutdowns.
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