What You Need to Know Now: Preparing for a Possible Government Shutdown
The continuing resolution currently funding government operations, including many federal contracts, will expire at midnight on April 8, 2011. Failure by lawmakers to pass another resolution or reach an agreement on funding for the remainder of the fiscal year will result in a federal government shutdown. The possibility of a shutdown has left contractors wondering how or even if they can continue to perform their federal contracts.Construction contracts awarded on a fixed-price basis will be substantially unaffected by the shutdown. However, for most cost-type contracts, time and materials contracts, IDIQ contracts, and those contracts that have yet to be awarded, the shutdown will likely suspend operations completely or delay awards indefinitely. Therefore, it is important for contractors to prepare for the consequences of a government shutdown.
AGC FAR Committee Chairman Dirk Haire has written an article and provided a matrix and model letters for contractors to utilize to help answer questions on what to do in the instance of a government shutdown.
To view the article click here.
To view the matrix and sample letters, click here.
AGC has also prepared information from the following Federal agencies on their contingency plans should the government shut down at midnight April 8.
Army Corps of Engineers
The Chief of Staff of the U.S. Army Corps of Engineers issued guidance to its entire workforce on the potential government shutdown. Click here to view.
Bureau of Overseas Building Operations
OBO issued the following guidance:
In the event the Government is shutdown between Friday, April 8 and Saturday, April 9 and is not reopened by Monday, April 18, the scheduled April 26 OBO Industry Advisory Panel meeting will be postponed to a later date in May. If there is a shutdown and the Government is opened before Monday, April 18, we will proceed with the meeting as scheduled.
If a budget resolution is not passed, during the shutdown, OBO will not be allowed to communicate with panel members or meeting invitees.
Bureau of Reclamation
Department of Defense
Deputy Secretary of Defense William J. Lynn III issued guidance to its entire workforce on the potential government shutdown. The full guidance is attached, but the relevant section to DOD contractors is below:
“Generally, contractors performing work on contracts funded prior to a shutdown, whether supporting excepted activities or not, may continue working and will be paid out of the obligated funds, subject to further direction from the contracting officer. New contracts, or increases in funding of existing contracts, needed to support excepted activities may be entered into during the period of a shutdown, but payments under such contracts cannot be made until Congress provides additional funding. Contract personnel should also report to work on Monday, April 11, to be briefed on their status."
To view the DoD Shutdown Guidance in its entirety, click here.
Department of Veterans Affairs
View the Department of Veterans Affairs field guidance on a potential shutdown.
Federal Highway Administration
The federal-aid highway program will not be impacted by a shutdown. Because Congress has enacted an extension of authorization for Highway Trust Fund spending through the end of the fiscal year and there remains a balance in the trust fund, the Federal Highway Administration will remain open for business and will continue to process state DOT requests for reimbursement for on-going highway projects. States will also be able to continue to enter into contracts with the assurance of federal reimbursement.
General Services Administration
GSA Administrator Martha Johnson’s statement to all GSA employees:
“The Administration is still working hard to pass an FY 2011 funding bill to keep the Federal government operating. However, we must begin to plan for an orderly shutdown should Congress be unable to pass a funding bill.
In my message on Tuesday evening, I promised to provide you with updated information as we approach the expiration of the current Continuing Resolution. The two documents attached to this message provide detailed guidance for implementing an orderly shutdown of operations. If a new bill is not enacted or likely to be enacted by Midnight tonight, April 8, Federal departments and agencies will not be permitted to incur further financial obligations or perform activities funded by annual appropriations, except those required for the orderly shutdown of operations or performance of excepted activities. Please carefully review the attached documents and begin taking the necessary steps to ensure that you can activate this plan by Midnight tonight.
I appreciate everyone's patience and understanding in the face of so much uncertainty. Your continued professionalism and dedication reflect well on GSA.”
View the GSA Plans for Shutdown and GSA Operations in Absence of Appropriations.
National Resources Conservation Service
View guidance from the NRCS.
Naval Facilities Engineering Command
RADM Christopher Mossey issued a statement regarding a potential government shutdown:
“Today, the current continuing resolution expires if an appropriations bill or CR is not passed by Congress and signed by the President. While the Administration expects a government shutdown to be averted, we must plan accordingly. First and foremost, understand that being furloughed due to a lapse of appropriations is in no way a reflection on you or the value of your work!”
To view the complete statement, click here.
E-Verify Program
The E-Verify program, which is run by U.S. Citizenship and Immigration Services (USCIS), is not expected to be operational if there is a government shutdown. The E-Verify public website and the logon page to the E-Verify system is expected to include guidance for employers. The governing MOU for employers states “If the automated system to be queried is temporarily unavailable, the 3-day time period is extended until it is again operational in order to accommodate the Employer's attempting, in good faith, to make inquiries during the period of unavailability.” (See Article II C (II) of the MOU) The governing 1996 statute which created E-Verify specifically addresses extensions of the time periods if the employer tries to submit inquiries in good faith but the system cannot receive such inquiries, thus we believe there will be impetus to provide official guidance from USCIS about all deadlines associated with E-Verify queries, should the system not be operational. (See Sec. 403(a)(3)(B) of IIRIRA of 1996.)
Office of Management and Budget
Office of Management and Budget Director Jacob "Jack" Lew issued a memo to agency officials instructing them on how to approach the potential government shutdown.
To view the OMB guidance document click here.
Office of Personnel Management
Statement on the Potential Impact of a Lapse in Appropriations on Federal Employees by the Office of Personnel Management:
The President has made it clear that he does not want a government shutdown, and the Administration is willing and ready to work day and night to find a solution that all sides can agree with. That said, given the realities of the calendar, prudent management requires we plan for an orderly shutdown should the negotiations not be completed by the end of the current continuing resolution.
- To view full statement, click here.
- To view OPM shutdown contingency plan click here.