Key considerations as you face the government shutdown

As we rush headlong into a government shutdown, I’m feeling a mixture of déjà vu and an impending sense of doom.

We’ve been here before and we’ve watch the brinkmanship of elected leaders play out again and again. But something does feel a little different this time as well. Maybe it is the debt ceiling and the risk of economic collapse. The long term risk there is significant.

But experts like David Berteau, president of the Professional Services Council, say that the White House and congressional leaders are focused on the short term and we are unlikely to see a big fix come out anytime soon.

The bottom line is that almost all of this is out of your control, so what should government contractors be doing? Plenty.

We ran a column yesterday by attorney James Fontana that explores many of these actions. Berteau and PSC held a briefing yesterday as well reviewing proactive steps contractors should take as well as offering a historical perspective on government shutdowns.

COMMUNICATIONS

That is a key element of many of the actions being recommended.

Top of the list is talking to your contracting officers. As Berteau explained, the contracting officer is the ultimate gatekeeper on stopping and restarting contracts as well as determining what work can and can’t happen during a shutdown.

You need to be talking to your contracting officers now and throughout the shutdown, Berteau said.

“In addition to the contracting officers you have to talk to your customers, your program people who set the requirements, approve the invoices, etc.,” he said.

A close second is communicating with employees. Companies face a real dilemma, do you continue to pay employees and consume any cash on hand you have, or do you furlough employees and risk losing them?

The economy is different today that the last government shutdown in the winter of 2018-19. That was a partial shutdown so work continued at the Defense Department, Veterans Affairs and the Department of Health and Human Services. That’s a large part of the federal market, so companies had some wiggle room.

This time it will be a full-shutdown and because of the tight job market, furloughed employees should have plenty of opportunities to find employment elsewhere.

Some employees may be deemed essential at the start of a shutdown and will continue to work. Others may be deemed non-essential but will get called back in if the shutdown lingers on. Workers who were essential in the beginning can be deemed non-essential later.

ANALYZE, ANALYZE, ANALYZE

The data and insights you gain from talking to contracting officers, customers and employees all feed into your analysis of the current situation. But it is important to realize that your analysis and conclusions will change because the situation will change with the length of the shutdown.

What you do in the first few days will likely not be the same things you do in the second or third week, and beyond.

There are key questions you need to be asking your customer, according to Bertau:

• Has your contracting officer reviewed and implemented the agency’s shutdown guidance?
• Who provides access to government facilities, personnel, or information?
• Who can accept deliveries of goods and services? This is a critical because if no one accepts your work, you can’t move onto the next task.
• How do you contact the contracting officer during the shutdown?
• What is your remaining period of performance? If your period of performance runs out during a shutdown, will there be a contracting officer or other government official who can grant an extension?

PREPARE FOR THE UNKNOWN

First on the list of unknowns is how long the shutdown will last. You have no control over that, of course.

A major thing to consider is that a shutdown isn’t one-size fits all. There is no real consistency from agency to agency and often within agencies on how they will handle the shutdown.

So just because Agency X says one thing, Agency Y is just as likely to do it differently.

And inside an agency and office, you’ll likely face inconsistencies. Berteau shared the story of one set of contractor employees being sent home, while the employees from another company were deemed essential. This happened despite the fact they worked side-by-side on the same project.

Another unknown to prepare for is the recovery. As Berteau said, it’s simple to shut down and stop work, but it is more complex to reopen.

A lot depends on the contracting officers and how quickly they sign return to work orders, but there also are ripple effects, for example, on solicitations being issued and new awards being made.

Berteau said that for every day of a shutdown there are 3 to 5 days in subsequent delays. The last shutdown was 35 days so we are talking months and months before the government caught up.

There is still time of course for Congress to act but the best we can hope for is short-term continuing resolution that pushes the deadline out a few weeks.

A shutdown almost feels inevitable, so it’s best to prepare and expect the worst.