How Contractors Can Prepare for a Government Shutdown

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If a contractor with a project has already begun work, he or she may need to implement additional measures in case there is a government shutdown that causes the delay or termination of the job. When the government shuts down because the budget or other situations cannot be resolved, this leads to delays, the end of work for some and severe complications for others.

When the government cannot agree upon certain issues such as the budget, there is the possibility that it will shut down and all contracts and contractors working with agencies or for individuals are affected by these events. This requires those involved to become prepared for the possibility. Work is either delayed or stopped permanently, and the contractors and workers must put things on pause until the federal government and state governments are up and running again. In order to prepare, the employees and owners of companies must first obtain as much information about the shutdown as possible. If the event is remotely possible, preparations should start. However, it is important to keep transactions running as long as possible.

Companies with contracts through the government usually require a constant and open communication and dialogue with agencies. This is to ensure proper procedures are followed and that materials and resources are available for products and services. If patents or other intellectual property are included in these agreements and deals, research is also halted by the shutdown. While applications and other documentation may be filed or progress through these circumstances, the employees and workers are unable to perform job duties until the event has passed. Preparing through pushing as much through as possible until work may pick up again is crucial.

The Preparations

To start preparing for a shutdown, a company with a government contract should ensure all orders for materials and related resources have been received and completed. Bills should be paid with clients before the shutdown if possible, and various departments need contact for payments and other paperwork to ensure the taxes are provided. Employees and clients contact is essential so each individual and company is aware of any cutoffs if the government closes for an extended period of time.

Then, any resources that could waste or expire during the event should be used or sold. Equipment rentals need to be returned.
It is essential to have a contact that can explain if the shutdown is imminent or may not occur. This assist with planning and executing any preparations already setup. If clients need guidance on how to proceed, the owner or manager should communicate what measures are being implemented by the contracting company for the shutdown. The timeframe or deadlines for projects are either delayed or eliminated. Usually, the contract with the government agency is still in place unless it is severed prior to an actual shutdown that will occur. Legal representation should be hired or contacted to ensure all processes are legal and valid.

Planning and Carrying out the Plan

When a company is contracted with or to the government or an agency, there is the possibility that a shutdown event may occur at any point. This is connected to the decisions and conflict of politicians and certain circumstances that are usually broadcast by the news or through sources. One of the ways to plan for this eventuality is to ensure there is a plan for multiple events. The owner of the company is aware that the shutdown will affect materials, clients, employees and the product or service that is being manufactured or produced through the government contract. Time, money and energy are put into the production and knowing what to do based on the given evidence is important.

Once professionals have been notified of the details of a possible shutdown, the company will need to either hire a lawyer or contact the lawyer on retainer. Legal documentation must be examined to ensure the terms of the contract are not in breach, that any delays or reduction in the workforce and manufacture or distribution of products are not harming the project and all personnel are taken care of in the event. The lawyer in these situations then will inspect the contract for problems or complications in light of the shutdown. He or she will advise on the best course of action and examine the preparations for issues against the contract. With all other processes completed and the plan carried out, it is possible to retain the contract for future production.


Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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