Shutdown consequences set to begin for government contractors

October 1, 2013

Contractors in recent weeks have complained about losses in productivity from preparing for a potential government shutdown, but worse impacts are almost certainly on the way now that the closure has taken effect.

(Pete Marovich/Bloomberg)
(Pete Marovich/Bloomberg)

The Department of Homeland Security warned of what would be in store last week in a letter to partner firms. “As a consequence of the lapse, certain planned procurements may be cancelled and certain existing contracts may be stopped, reduced in scope, terminated or partially terminated,” the memo said.

DHS promised to notify businesses of any changes that would be necessary, but the answers cannot come soon enough for some firms. A recent Post article quoted company planners saying they found it nearly impossible to determine how the shutdown would affect them because of the many variables involved.

Among the factors to consider: Whether contracts are covered by past or future congressional appropriations — the latter would require a new spending deal from lawmakers and the White House  – and whether their workers are exempt from furloughs because they assist with essential government functions.

At this point, contractors can only wait for word from partner agencies and hope the shutdown ends sooner rather than later to minimize their losses and disruptions.

House Speaker John Boehner indicated on Monday that he would ask the House and Senate to appoint members to hash out differences between the two chambers’ proposals. There is no telling how long that process could take, but the last round of shutdowns during fiscal year 1996 lasted a total of 26 days.

To connect with Josh Hicks, follow his Twitter feed or e-mail  josh.hicks@washpost.comFor more federal news, visit The Federal Eye, The Fed Page and Post Politics. E-mail federalworker@washpost.com with news tips and other suggestions.

Josh Hicks covers the federal government and anchors the Federal Eye blog. He reported for newspapers in the Detroit and Seattle suburbs before joining the Post as a contributor to Glenn Kessler’s Fact Checker blog in 2011.
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