If the federal government closes its doors on Oct. 1, it won't be like past shutdowns for one big reason: contractors.
"The 2013 shutdown was different than every other shutdown that had come before it," said John Cooney, a former counsel for the Office of Management and Budget and current partner at Venable LLP. "Many more government services are delivered through contracts, they've been outsourced. There are just that many more functions that are delivered externally and that complicates everything."
Cooney was part of a Sept. 21 Professional Services Council panel that spoke on how to prepare for a government shutdown.
And as the threat of a shutdown looms large on Oct. 1, many in Washington are harkening back to their 2013 recollections of the last government closure.
But for the contractors wondering whether they need to show up for work after Sept. 30, here are five things you need to know:
- What gets shut down
The Antideficiency Act governs how a shutdown works. It says agencies can't obligate funds or contract work without appropriations. Agencies are also prohibited from accepting volunteered services.
There are exceptions where contractors can continue to work, including emergency risks to property or human health, such as a hurricane. Agencies funded on multi-year appropriations or no-year appropriations can also remain open, leaving contractors some options, depending on what the agency projects they may be working on.
"The agencies' controller's offices are going through the budget, line item by line item to try and figure out which functions have multi-year or no-year funds and where they have discretion to reprogram and move money from one program to another," Cooney said.
So how do contractors know which projects will remain open?
- Stick close to the contracting officer, now
During a shutdown, all contractor guidance will come from the agency's contracting officer. This person is tasked with providing contractors updates on when work officially stop, starts or the status of contracts throughout the shutdown.
Lisa Ashcraft, vice president of contract operations for Abt Associates, said that contractors need to be making plans for a shutdown and communicating not only with their contracting officer, but also their own teams, before it occurs.
"Your contract staff really need to start those conversations now," she said. "Take a look across the breadth of the contracts that you have and understand which ones are key.
"Where do you have people that are on the government site, where are the people that are going to be the most vulnerable, where do you have contracts that are relying on that additional funding to come in. Start from that perspective and have your folks already starting to reach out."
Contracting officers will also be integral is the government enters what's called a soft shutdown, where any closure lasts matter of hours while negotiations continue in Congress.
PSC officials also said that even if the contracting officer is out of the office, someone will be tasked with providing contractors information throughout the shutdown.
- Don’t stop working until you get a stop-order
Agencies will have to notify contractors when to stop working, ultimately with a stop-work order specifying that contracts should cease. Until receiving that order, Ashcraft said contractors should keep working.
"Unless and until you get that piece of paper that says 'Stop-Work order' on it, you're first and only response without it should be, 'I'm required to continue.'"
Ashcraft reiterated that a stop-work order must come from the contracting officer in writing for contractors to cease working and not from other entities, like technical staff.
Alan Chvotkin, PSC's vice president and counsel, added that work can continue on fully-funded contracts can continue, unless it requires engagement with a government official for the work to be done or government specifically denies contractors access to its facilities.
"It's not enough that the facility be closed," he said. "You have got to be denied access to that facility [to stop working]."
- Document everything
Above all, the panel said that contractors should be documenting all work and expense they accrue before, during and after a shutdown occurs.
"You need to make sure you and your staff document everything that they do, especially from the moment that they are in that stop-work mode," Ashcraft said.
Documentation of all activity is important because the government will reimburse certain expenses once a shutdown ends.
Activity conducted by contractors during the shutdown and after it must be filed separately for any chance of getting reimbursement from the government, Chvotkin said.
"When you get that stop-work order, you have got to account for that work set and all the activity associated with it," he said. "Then the government restarts the work, that old activity shuts off and [requires] a new set of charge codes and a new set of accounting and documenting to restart the program."
- Know your Risk
The world of a government shutdown can be full of peril for contractors, especially if time-sensitive projects are on the line.
If contractors incur unforeseen costs because of a shutdown, say for having to cancel conferences and other events, some can be reimbursed through the government's policy on equitable adjustment.
Ashcraft said that contracts may also want to renegotiate their deliverables with vendors based on how the shutdown may affect them.
"You need to make a decision on how to manage your own risk," Ashcraft said.
Above all, contractors are obligated to mitigate costs, Chvotkin said, and if there is thorough documentation of that mitigation, then there is a chance the government will reimburse.
For more information, visit PSC's shutdown resource page.
