Government Shutdown – Contractor Contingency Plan Must Haves

Updated: Feb 10, 2020

Every contractor should have a shutdown contingency plan in place in order to mitigate the disruption and cost that comes with a government shutting down.

Your company’s comprehensive contingency plan should focus on mitigating the impact to your business operations by leveraging your corporate functions such as human resources, contracts, accounting, and information technology to holistically manage the shutdown and its impact to your business and employees.

Top items to include in your contingency plan include:

How familiar are you with your contracts? Understanding the contract type, how the contract is funded, whether your team performs essential functions is where you start. Putting in place a detailed communication plan with your contracting officers, your prime and subcontractors, and of course the employees will be key!

How will your employees be impacted? Be prepared to give your employees direction whether they can continue to work, work partially, or be precluded from working at all. Outline the options that will be available to employees, and be prepared to answer a lot of questions. Understand the laws, both state and federal that govern employee wages. Be cautious when receiving direction on your employees, rules for the contractors are not the same as they are for government employees.

How will you manage the financial impact? Review how time should be tracked during the shutdown. If the costs will be recoverable later, it would be easier to properly segregate them early on. Will your cash flow be impacted? When the government shuts down, the payments to contractors stop. Review your cash flow carefully and make necessary adjustments before it is too late.

Every contractor should have a plan, it is the easiest way to mitigate the risks associated with the shutdown. The best time to do it is when you are not watching the clock to see if the budget is passed or a continuing resolution is approved.

P'Simer Law, Irina P'Simer

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