Implications and Consequences of a Government Shutdown-A White Paper and Audio Seminar by Eric S. Crusius, Esq.

The federal government will run out of funds to operate on March 4, 2011. After that date, without a budget passed by Congress and signed into law by the President or another continuing resolution, much of the federal government will shut down. For government contractors, the implications and consequences of a shutdown are largely unknown because unlike other aspects of government contracts that are dictated by detailed regulations such as the FAR, there is little guidance as to what to do in the event of a shutdown.

Centre has been monitoring this issue closely since the November elections and will be holding an audio seminar on March 1, 2011 from 12:00 p.m. until 1:30 p.m. (registration details below) and has prepared a “White Paper” utilizing the little guidance there is to provide some useful information to government contractors and their government counterparts. The White Paper and audio seminar not only introduce the causes of a shutdown, but also details the types of contracts affected and not affected by a shutdown, how work stops, and goes into some specific legal issues that arise.

Here are some highlights:

• Depending on the type of contract a contractor has with the Government, they may not be affected by a shutdown;
• Contractors holding affected contracts may nonetheless be exempted from the shutdown;
• Contractors holding affected contracts not exempted from the shutdown cannot continue to perform and expect to get paid retroactively once the Government restarts;
• Steps contractors should take in advance of the possible shutdown (starting now); and
• Steps contractors should take to ensure all allowable expenses are reimbursed once the Government restarts.

Our first bit of general advice is to take inventory of your contracts and contact your contracting officer to see if he or she has any guidance as to next steps. It is also important to document everything you do, mitigate any expenses, and not do anything that runs afoul of the FAR.

If there is a shutdown, contracting professionals and their governmental counterparts will be in unchartered waters. It is imperative to be as prepared as possible, take all precautions, and plan for all contingencies. If you are interested in attending the audio seminar, please contact Nicole Snyder [email protected] or (703) 288-2800 (there is a $35 registration fee, but is free for our existing clients). The first hour will be devoted to the presentation and the last thirty minutes or so will be for questions.

If you would like a copy of the White Paper, contact me by e-mail at [email protected] or by telephone at (703) 288-2800 and I will forward our White Paper to you.