At the end of September, the United States federal government was close to a potential shutdown. However, a stop-gap spending bill to keep the government running for another 45 days was passed at the last minute. As the bill was temporary, a shutdown could still happen later this year. So, museum industry suppliers worldwide should understand how this funding lapse could impact operations and contracts.
All government departments and agencies will shutter if lawmakers cannot reach a budget deal. The last shutdown from December 2018 to January 2019, the longest ever at 35 days, costing the U.S. economy $11 billion. So, ensure your business is prepared for a shutdown using the following tips.
WHAT DO SUPPLIERS RELIANT ON GOVERNMENT TENDERS NEED TO KNOW?
Review active contracts to see if they include FAR Clause 52.242-15 permitting temporary work stoppage. If so, expect written direction from the contracting officer on halting or continuing work. Without funding obligations, agencies cannot award new contracts or modifications.
However, completely halting performance may not be required. Contracts already fully funded can continue. Multi-year contracts retain funding as well.
WHAT SHOULD SUPPLIERS DO TO PREPARE FOR A GOVERNMENT SHUTDOWN?
- Communicate. With guidance unclear, communicate with contracting officers, subcontractors and vendors immediately about impacts and ideal responses. Will budgets sustain current contracts through a weeks-long closure? Seek written confirmation of directions like preparing for suspended operations.
- Suppliers' internal planning is also essential. If government sites close, employees may need reassignment. Solidify contingency workforce plans and payroll expectations—alert staff and subcontractors to potential shutdown effects.
- Document all shutdown costs, like unabsorbed overhead, for possible reimbursement requests later.
- Keep operating if officers confirm your work's essential status. Remain flexible and target solutions to minimize expenses.
- Stay vigilant regarding funding updates.
Though unpredictable, recent history offers context. The 16-day 2013 shutdown sliced 0.3% from that quarter's gross domestic product. Standard & Poor's estimated that the 2018-2019 event subtracted $3 billion from the economy.
While a shutdown can be challenging, suppliers can take proactive steps to mitigate shutdown difficulties. So, review active contracts and critical clauses, maintain communication, keep top talent, creatively reassign personnel if required, and document expenses. A flexible, cooperative approach and proper planning help contractors overcome shutdown hurdles.
We noticed a slight slowing of U.S. federal tenders in the weeks following the 'almost-shutdown'. However, we continue to source work from state, city and local governments and find tenders directly from NGOs, museums, galleries and heritage sites. We also publish content from other regions. So, if an extended government shutdown occurs, we can still bring work to your desktop.
Remember - work is out there, and we want you to get it!
