5 ideas for your contractor’s government shutdown plan

When asked whether the government will shut down on Oct. 1, few contractors at a Professional Services Council special program Sept. 21 raised their hands and said yes.

But it doesn’t mean they shouldn’t be prepared.

If the government closes this year, it might look more like the 16-day shutdown two years ago than the one in 1995, said John Cooney, a partner at Venable law firm and former general counsel to the Office of Management and Budget.

“Since the experience is only two years behind them now, I think the agencies make the rational assumption that what happens this time around will more or less be the same as it was in 2013,” he said. “The government learned a lot of lessons from what happened in 2013.”

The 2013 shutdown was different than any other the government had ever experienced, Cooney said. Agencies buy more services through contractors than they did during the 1995 shutdown, and contractors generally communicate with agencies through web-based databases – tools they didn’t have 20 years ago.

Those differences, Cooney said, might be one reason why some contractors heard from their agency contracting officers well before the 2013 shutdown – and may not hear from their clients in advance of a potential shutdown this time.

“It had been so long and everything had been done by paper in those days,” he said. “I am told that GSA couldn’t find their 1995 shutdown plan. And then finally somebody in the Kansas City regional office was clearing out a storage room and found a three-ring binder with the GSA plan, and that’s how GSA found out what their predecessors had thought.”

This time though, contractors have advice and past guidance from two years ago to help them develop their shutdown plans.

Take a look at your contracts

Now is the time to take stock of all of your contracts. Evaluate which contracts are key, and which ones depend on annual appropriations or multi-year funds.

Some agencies have authority to contract in advance if operating without those services are a risk to health or property, Cooney said.

Lisa Ashcraft, vice president of contract operations at Abt Associates, suggests contractors look at whether their employees work at government sites and might be vulnerable to furloughs.

Communicate with your agencies

Constant communication with your agencies in the days and weeks leading up to the end of the fiscal year is key, Cooney and Ashcraft said.

Ask your agency contracting officers and administrative personnel for advice. Ask about the scope and timeline of a potential shutdown, Cooney said, and look into what activities you will and won’t be able to continue if the government closes.

“What do you think is going to happen? What happened in 2013? Is it possible to draw from that, if your program goes back that far and if you have the contract? What fate am I most likely to suffer? You have to put it that way, because the people you’re talking to are highly unlikely to know the answers to your questions,” he said. “Agencies keep revising their shutdown related plans right up until the last minute.”

Having these conversations are important now, because contracting officers are often the first ones out the door on Oct. 1, Ashcraft

“Contracting officers aren’t often deemed essential personnel,” she said. “So more than likely come Oct. 1 if the shutdown occurs, that phone is going to continue to ring off the hook, and by then it’s too late.”

Ashcraft also suggests designating one or two people on your contracting staff to keep track of any conversations they have with their agencies – who they’re talking to, when and what they find out.

Get everyone involved

Developing a shutdown plan, Ashcraft said, is an iterative process, and it isn’t just a problem for your company’s contracting teams to tackle.

Top leadership and human resources department also have parts to play.

“[Your HR department] needs to take a look at your policies,” Ashcraft said. “Do you have a policy in the case of a government contracting shutdown?”

Congressional legislation guaranteed back pay for furloughed federal employees in 2013. But there’s no legal mandate for furloughed contractor employees.

“That’s a business decision that the company itself has to make, as to what its long term relationships with its employees are,” Cooney said.

Manage risk

Contractors still have expectations and deadlines they need to meet — regardless of shutdown fears.

One contractor said he was hesitant to secure a facility for an upcoming conference, but agency project staff told him to continue with the planning.

“You need to make a decision on how you’re going to manage your own risk,” Ashcraft said.

She suggests contractors look back at the agreements they’ve made with agencies and consider renegotiating their deliverables.

One size doesn’t fit all

One contractor’s shutdown experience might differ greatly from another, because the experience at each agency varies, too.

Federal employees at five agencies – the Defense, Treasury, Agriculture, Interior and Health and Human Services Departments – took two-thirds of all furlough days during the 2013 shutdown, Cooney said.

But employees at the Energy Department took a total of 1,000 furlough days. The difference, Cooney said, is that many of DoE’s contracts operate with multi-year funding.

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