With Congress and the President seemingly at loggerheads over federal spending, there is an increasing possibility that the federal government will shut down on October 1 when the funding for the current fiscal year expires.   While we’ve been down this road before, each of the last 3 years for example, prudent business planning suggests that government contractors should be preparing themselves in the event there is a shut down.

What’s the status?  Congress has failed to enact any of the 12 annual appropriations bills for FY 2014 and the current fiscal year funding is set to expire at midnight on October 1, meaning funding for the entire federal government is at stake.  On September 20, 2013 the Republican-controlled House of Representatives passed a continuing resolution (CR) to fund the government through December 15.  Also included in this legislation was language defunding the so-called Obamacare health care plan.  The Democrat-controlled Senate is expected to strip the language defunding Obamacare and send the bill back to the House.  This sets up a potential gridlock situation and it is unclear if either side is willing to budge.

Why does this matter?  As a government contractor you need to be prepared in the event of a shutdown, since funding for many if not all of your current contracts may be affected.  Your employees are reading the news and they know the potential and they want to know their leadership is making contingency plans.

What should you do?  OMB has sent a memo to government agencies telling them to prepare for a shutdown and prudent business planning suggests you need to be ready too.  Here’s a quick checklist of things you should be doing and thinking about related to a potential shutdown:

1. Be Proactive:  Don’t sit back and let the rumors swirl, take charge of the situation within your company.
2. Communicate:  Communicate honestly, early and often with your employees about what you know and what you expect will happen if the government shuts down.  Make sure your company speaks with “one voice.” This will keep misinformation (i.e. rumors of furloughs and layoffs) to a minimum.
3. Understand Your Contracts:  Review your current contracts to understand which will be affected in the event of a shutdown and which will continue.  Projects funded by revolving funds for example won’t be affected.
4. Gather Intelligence:  Gather as much intelligence as possible by talking to industry partners and trade associations and having your engagement managers talk to their contracting officers and COTRs, i.e. the client.
5. Set Up a War Room:  Set up a formal process inside your company to monitor developments related to the potential shutdown, a “war room” if you will.  Be ready to kick it into high gear if a shutdown occurs.

Let’s all keep our fingers crossed and hope that Congress and the President are able to work out an agreement that keeps the government open and operating beyond October 1, while preparing yourselves for a potential shutdown through effective communication with your employees and smart business planning. Contact me at mhettinger@siia.net or (202) 789-4456 with any questions.

Michael Hettinger is VP for the Public Sector Innovation Group (PSIG) at SIIA. Follow his PSIG tweets at @SIIAPSIG. Sign up for the Public Sector Innovation Roundup email newsletter for weekly updates.