GovCon Companies Urged to Prepare for Potential Government Shutdown

What's Happening?

As the possibility of a government shutdown looms, GovCon companies are advised to prepare by revisiting and updating their shutdown plans. Historical data shows that since 1998, every fiscal year has seen continuing resolutions before a budget was passed, with five shutdowns occurring since 1995. The most recent significant shutdowns were during President Trump's term, including a 35-day partial shutdown in late 2018 and early 2019. Companies are encouraged to evaluate contracts, communicate with contracting officers, and ensure employees understand their roles during a shutdown. Additionally, businesses should push for invoices to be paid and modifications issued before a shutdown occurs.

Why It's Important?

A government shutdown can have significant impacts on GovCon companies, affecting contract execution and employee work schedules. Companies must manage risks associated with shutdowns to maintain operational stability and financial health. The shutdown can disrupt cash flow, delay payments, and halt contract work, leading to potential financial strain. By preparing in advance, companies can mitigate these risks and ensure compliance with government regulations, positioning themselves for recovery post-shutdown.

What's Next?

Companies should continue to monitor government actions and updates regarding the potential shutdown. They should maintain communication with contracting officers and subcontractors to understand the implications of a shutdown on their operations. Additionally, businesses should track expenses related to the shutdown to ensure proper documentation and compliance, which will be crucial for recovery efforts once the government resumes normal operations.