It’s 2019, and we started the year with a “government shut down.”
As a small to medium size business doing business with the Department of Defense and the federal government, how do you handle the next shutdown? What happens when the government decides to shut the government down again? Being prepared will definitely put you in a better position to handle the next one.
According to an analysis by the Competitive Enterprise Institute, the federal government is made up of somewhere between 60 and 430 separate agencies. No one knows the exact number of the federal government’s prime agencies. The Department of Defense is considered to be one agency. There are hundreds of sub-agencies under primary agencies.
Things to consider in preparation for the next shutdown:
Be very familiar with the clauses incorporated in the terms and conditions of the contract awarded. Contractors must determine whether they will continue performing or stop work.
A government shutdown is not a self-executing stop-work order.
The shutdown itself does not suspend a company’s obligation to perform, nor does it release the government from its obligation to pay for performance.
It can be determined if the contractor’s work requires any new appropriation or authorization of spending.
There’s also a need to identify whether critical government personnel, facilities, and resources are available.
It is important to have direct contact with your contracting officer. If your contracting officer issues a stop-work order, then stop work and comply with the order.
If you do not receive a stop-work order, then you must consider:
whether your contract is deemed required to support "exempt" government activities, and
how your contract is funded.
One important compliance requirement to understand, does your contract require your company to support activities exempt from the Anti-Deficiency Act? Many of the legal complications of a government shutdown derive from the Anti-Deficiency Act, which makes it a crime to obligate the United States to spend funds that Congress has not previously appropriated. There are some narrow exceptions: https://www.gao.gov/legal/appropriations-law-decisions/resources.
Dannie E. James, Sr. is president of the JE Group, LLC, a government contracting consulting firm based in Atlanta.
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