How soon will you feel the pain of a shutdown? Very soon.
Gettyimages.com/MANDEL NGAN / Contributor
By
Nick Wakeman
A shutdown may be inevitable and so is the pain and chaos that will follow.
It looks like a government shutdown is all but inevitable with the House and Senate unlikely to agree to a continuing resolution before midnight Saturday.
When the calendar flips to Oct. 1 there will be no appropriations for fiscal year 2024 and government agencies will be shutting down operations within hours.
While the general public may see little immediate impact, government contractors will feel an immediate impact and it might be very painful.
Here are things to remember:
OPERATIONS HALT
All agencies close their doors, though certain components may stay open if granted an exception. You should already know if your customer will have an exception. If you haven’t had that conversation with your contracting officer, good luck.
If your employees are on site, they will be locked out. If they work from a company facility, they can continue to work.
But contractors will not be paid during the shutdown because there likely will be no one to approve expenditures. There is no guarantee you will ever be paid for the work performed during a shutdown. Don’t bank on retroactive payment.
Speaking of banks, have you talked to your banks? I’m sure you have.
SHUTDOWNS ARE TEMPORARY
Shutdowns don’t last forever. Most are just for a few days. The 2018-2019 shutdown lasted 34 days, but that was mostly because it was technically a partial shutdown. Appropriations were already passed for several agencies, so they stayed open.
Once a CR passes, it will take time for the government to restarted and it isn’t a one-for-one kind of thing. Once we are beyond a few days, it might take four or five days to recover for each day the government is closed.
Keep your paperwork and document everything you do during the shutdown.
ALL THIS FOR A CR
Both chambers and both parties are only talking about a continuing resolution that will get us to November, so be ready for déjà vu all over again in 30 days or so.
Neither party has a clear majority in either chamber so any long-term solution will require that dreaded c-word – compromise.
The short-term CRs that are proposed differ greatly between parties and the chambers. On the House side, the GOP itself is at odds on how to move forward. But what worries me is that none of the proposals seem to set the framework for a final budget.
A second complicating factor is that House Speaker Kevin McCarthy (R-California) is in a no-win situation. To get a CR passed and much less a final budget, he will have to compromise with the Democrats. But if he compromises, he’ll likely be ousted by the right wing of his party.
What happens then?
It’s going to be ugly, so brace yourself.