Presented on September 26, 2022
David J. BerteauPresident & CEO
Professional Services Council
Government Shutdown Webinar
FY23 Continuing Resolution & Preparing for a Possible Shutdown
Provided by PSC for recipient use only.
2
What to Watch
3
Status of the FY23 Continuing Resolution
CR expected to last until
Senate expected to vote first
is
Senate
to
what will pass Senate and
year ending midnight
4 •
mid-December 2022 •
• Plan
for
bill
include pipeline permit changes • Unclear
House • Fiscal
Friday might increase chances of a short-term shutdown lasting through the weekend Provided by PSC for recipient use only.
&
Continuing Resolutions
Shutdowns 5 • A Continuing Resolution (CR) is an appropriations law – nearly every fiscal year starts with one or more • CRs limit spending, mandate “no new (program) starts,” often no “stops” • Limits may be modified by specific CR provisions (“anomalies”) • Federal Government shutdowns occur when there is a lapse in appropriations • Failure to enact an appropriations triggers a partial or total government shutdown Provided by PSC for recipient use only.
Shutdowns Impact Contracts • Contracts that were already funded prior to the lapse continue UNLESS • They require actions by an unavailable government employee • They require access to unavailable government facilities • A contracting officer issues a stop-work order HOWEVER: • Contractors cannot be asked to work “at risk” or in a temporarily unfunded status • Contractors cannot displace federal employees • No augmentation (supplementation) • No volunteering service (if you want to be paid) Provided by PSC for recipient use only.6
Government Shutdown Actions
• Executive Branch (White House/OMB) has discretion over which federal government actions cease under a shutdown and which continue.
• These actions can change as the shutdown continues
• Federal civilian personnel are either required to work or required to cease work. Their pay is generally stopped (they are always paid later)
• Contractors follow different procedures and rules, with direction from contracting officers. Provided by PSC for recipient use only.7
What Continues? Some Examples • Obligations authorized by law (including advance appropriations) • Obligations necessarily implied by law (e.g., paying social security) –White House has broad discretion here • President’s core constitutional duties (determined by him) • Activities needed to ensure safety of human life or protection of property (narrowly or broadly defined) • Activities under Revolving Funds or Non-Appropriated Funds • Agency solicitations and awards may pause or continue Provided by PSC for recipient use only.8
Contract Stop Work Orders
• If contract funding is in place before the CR, you must continue to perform • Stop Work orders must be issued by an authorized contracting officer • Stop Work orders (FAR 42.1303; 52.242-15) can be applied to any type of contract, at any time • Short-term focus • not longer than 90 days • can be open-ended, partial, or complete • When shutdown ends, contract must restart or convert to termination for convenience or default • Restart can take days • Remember, even without a Stop Work order, contract work can be interrupted if a contractor is unable to access government facilities Provided by PSC for recipient use only.9
First,
Questions to Ask Before a Shutdown
with
(see PSC
Second,
• How to contact
• Who can act if a
• How to
•
•
(in
event of
officers
officer isn’t there, and how you reach them
•
•
by PSC for recipient use only.
(see PSC
be familiar
the latest agency shutdown guidance
Government Shutdown Resource Center)
determine the following
the
a temporary shutdown):
your contracting
during shutdown
contracting
gain access to government facilities, personnel or information (including classified information)
Who will accept deliveries of goods or services
Who will approve invoices for payment
Who will approve the exercise of an option
Be familiar with the latest agency shutdown guidance
Government Shutdown Resource Center) Provided
10
Pre-Shutdown Actions: Your Employees • Know where your employees are and how to reach them (including travel, leave, etc.) • If on-site at government facility • How to ensure access to government facility • Who to contact if access is denied • Who can work remotely if access is denied • Any shutdown impact on non-government work sites • Possible need to furlough employees – direct and indirect charged employees • WARN Act/other labor law limitations • Other Human Resources/Labor Law/Union Considerations • Prepare for possible issues over unemployment compensation, medical coverage, etc. Provided by PSC for recipient use only.11
Contract Status – Pre-Shutdown Checklist • Consult where necessary with your contracting officers • Available period of performance remaining and key dates • Base contract • Options/renewal dates • Task/delivery order dates • Timetable for critical activities and deliverables • Know who during a shutdown will accept deliverables and authorize proceeding to subsequent tasks • Potential for a Stop Work Order to be issued, and under what circumstances Provided by PSC for recipient use only.12
Invoices
•
• Can you take
• Can you take advantage of
pay options?
•
• Update and submit all possible invoices for work performed
Does your contract provide constraints on billing?
advantage of accelerated billings?
accelerated
Who will authorize payment on invoices during a shutdown? Provided by PSC for recipient use only.13
Stop Work Orders • Upon receiving a Stop Work Order, stop all work – including subcontractors and vendors • Identify effect on effort • Account for and track any changes required because of the stop work • Document any costs incurred - Stop Work actions create an entitlement for recovery of costs • Start preparing claims, as a claim must be submitted within 30 days of restart (or 1 year if terminated for convenience) Provided by PSC for recipient use only.14
Statutory Deadlines Are Not Automatically
Under Shutdowns
bid protest dates
Extended
• GAO
• Agency appeals/claims • Court filings But - circumstances may lead to adjustments, so be prepared to try Provided by PSC for recipient use only.15
sufficiency to
delays
Additional Considerations • Assess cash flow
accommodate payment
• Can you sustain B&P costs? • How long can you pay employees without reimbursement? • What are the business implications of a continued shutdown on your key customers? • Will any debt service agreements, bank covenants, or lines of credit be affected? • Other implications? Provided by PSC for recipient use only.16
When Shutdowns End • Continue to meet contract deliverables • Keep invoicing for prior work • Be prepared for immediate resumption of stopped work • Expect solicitation due dates and new awards to be affected (3-5 days to recover for every day shut down, including weekends!) • Prepare claims for Stop Work Order impacts (know the relevant timetables) Provided by PSC for recipient use only.17
In Summary • Analyze your current situations now • Plan for multiple possibilities (length, effects, impacts) • Begin communications with contracting officers now • Communicate before, during, and after • Mitigate wherever possible • Account, account, account • Document, document, document • Plan to seek recoveries promptly, and watch for required notices and timeliness rules Provided by PSC for recipient use only.18
PSC’s Government Shutdown Resource Center What You’ll Find • Resources - bill texts, White House orders, previous PSC webinars • Up-to-date chart on Status of Appropriations • Agency guidance documents & reports • Recent PSC government funding-related Letters • Shutdown, CR, and appropriations news articles • Slides from this briefing Provided by PSC for recipient use only.19
Upcoming PSC Events
Provided by PSC for recipient use only.
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Meetings
Upcoming
PSC Events
in the Coming Month Sep 28 Veterans Affairs Task Force Meeting | Virtual Sep 29 Homeland Security Task Force Meeting | Hybrid Oct 7 Government Affairs Committee | Virtual Oct 13 Contracting Working Group | Virtual Oct 27 HHS Task Force and Tech & Innovation Council Meeting | Hybrid Oct 27 Council of International Defense Companies | Virtual Conferences Oct 20 Defense Conference | Arlington, VA & Virtual Nov 14 Development Conference | Georgetown & Virtual Dec 7-8 Vision Conference | Virtual Provided by PSC for recipient use only. 21
