Effects of Government Shutdown on Contractors Still Uncertain

government shutdown

As the government shutdown approaches a little over a week of duration, it is still uncertain how large an impact the shutdown will have on federal contractors and small businesses. However, it is agreed that the longer the federal government remains shut down, the more it will disrupt businesses that rely on federal contracts to remain operational.


Currently, while contracting opportunities have slightly slowed down, there have still been over 1000 new solicitations posted to the FedBizOpps website. Many agencies are still funding and operating “essential services,” however what is considered essential is not necessarily clear with every agency. The decrease in opportunities and funding is already resulting in many contractors putting current employees on furlough and freezing new hiring activities, according to reports by Bloomberg and USAToday. Some vendors currently working contracts are experiencing problems getting work completed due to furloughed agency employees who are necessary to approve purchases or grant access to work sites.


Another concern many contractors are facing is the question of whether they will be paid on time or at all. Until Congress reaches an agreement, many projects that were not pre-funded may not have available cash resources in order for contractors to be paid. Even after the shutdown finally ends, it will be up to Congress and agencies to determine when and how much to pay contractors who performed work during the shutdown.


The SBA has released their contingency plan during the shutdown, which involves closing the operation of their services and programs except their Disaster Loan Program. While any previously approved loans will still be funded, no new loans will be approved during the shutdown.

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