On the evening of November 9, the U.S. Senate agreed to a deal aimed at ending the government shutdown. The deal is the first step toward reopening the federal government and will now face a vote from the House of Representatives.
The federal government has been shut down since October 1 after annual appropriations lapsed. Pursuant to the Antideficiency Act, federal agencies have been prohibited from incurring obligations or expending funds without an enacted appropriation unless otherwise authorized by law.
Since October 1, most federal government operations have ceased, and many federal employees have been temporarily furloughed.
The shutdown’s broad impact on federal contractors has ranged from payment delays and government staffing issues to the closure of fora that decide protests and claims. With the government on the precipice of reopening, federal contractors should prepare for new procurement opportunities, ensure contract performance proceeds according to applicable rules, and reengage with any postponed dispute procedures.
Guidance for Federal Contractors
The Government Accountability Office will reopen, and the boards of contract appeals will resume business as usual.
- The Government Accountability Office (GAO) bid protest office has been closed and their filing system offline for the duration of the shutdown.[1] Protest filing deadlines have been tolled until the first day GAO reopens. Accordingly, contracts awarded shortly before the shutdown have an extended window for protests. Contractors seeking to protest awards made just prior to the shutdown should prepare protest materials in anticipation of the reopening. Conversely, awardees should be aware that unsuccessful offerors are still within the protest window.
- During the shutdown, the boards of contract appeals have continued accepting new appeal filings, but other deadlines, such as scheduling, discovery, reports, and depositions, have been postponed. In some cases, the boards of contract appeals have issued filing extensions that will begin once appropriations are restored. Contractors actively involved in an appeal should be prepared to reengage with the process.
Ensure funding and payment on active contracts.
- Although performance largely continued for fully funded fixed-price or cost-reimbursement contracts where the estimated costs were previously obligated, contractors should ensure payment processes resume when the shutdown ends.
- Contractors should track any delayed payments during the shutdown as they may be entitled to interest on delayed payments pursuant to the Prompt Payment Act.
Communicate with the government and subcontractors.
- Although some agency personnel continued to work throughout the shutdown, contractors should promptly reach out to ask for instructions regarding the reopening.
- Contractors should communicate relevant information to their subcontractors and ensure all personnel understand the consequences of the government reopening.
Track and organize the impacts of the shutdown and prepare potential requests for equitable adjustment.
- The shutdown may have caused performance delays based on restricted access to job sites or an inability to obtain timely approval from furloughed government employees. Contractors should keep organized records of these project impacts and should begin preparing potential requests for equitable adjustment.
New awards and options will resume once the government reopens.
- During the shutdown, contract awards and the exercise of options have largely remained paused unless they were tied to excepted or exempted activities. As the shutdown concludes, agencies will begin awarding new contracts and exercising options. Contractors expecting awards should be ready to commence performance, and those in the market should prepare for new procurement opportunities.
Conclusion
While the Senate’s vote is only the first procedural hurdle toward reopening the government, contractors should begin to prepare for the end of the shutdown. Whether pursuing a new contract, seeking an adjustment for shutdown-related delays, or reengaging with an appeals board, contractors should expect slower response times as the government comes back online. Planning ahead will help contractors stay positioned for a smooth transition.