During a federal government shutdown, existing contracts aren’t always put on hold. If a contract still has time and funding allocated, it typically continues, unless the contracting officer decides otherwise. The contract remains valid until the funding is exhausted.
Once funding runs out, contractors can choose to pause work or take a risk, hoping for reimbursement post-shutdown.
Key clauses to consider include FAR 52.242-14 (Suspension of Work), FAR 52.242-15 (Stop-Work Order), FAR 52.242-17 (Government Delay of Work), and FAR 52.243-1 (Changes – Fixed-Price).
Don’t forget subcontractors!
Subcontractors have a direct relationship with prime contractors, not the government. Prime contractors should work with their subcontractors immediately to discuss if subcontractors should hold off on contract performance. Communication is crucial.
