CONGRESSIONAL LEADERS EXPECT LONGER SHUTDOWN

The breakdown in talks between the White House and Congressional leaders last week has left many senior Congressional members believing that the partial government shutdown could be with us for several weeks.  Both political parties seem to have substantial unity for their respective positions – at least for now.  While the House has voted on passage of individual agency spending bills, Senate leaders have said that they will not consider any measure to re-open the government until a bi-partisan deal has been worked out with the White House.  For contractors, this means that the payment on invoices already sent to closed agencies will continue to be delayed, closed agencies will not be able to have their employees travel or meet with industry, and, importantly, that employees that work on federal sites that are now closed, will not be paid via their usual charge numbers.  It is highly unlikely that contractors will receive “back pay” when closed agencies eventually re-open. Additionally, agencies that are closed, with only essential employees at work, are highly unlikely to take meetings with contractors for business development purposes.  The situation continues to shift in some “closed” agencies as well.  Those that generate their own user fees, such as the Interior Business Center, are at least somewhat open, for now.  When user-fee money is spent, however, some of those agencies may shift to closed, or reduce operations from what they are currently.  The US Courts office has announced that this is the course they are likely to follow.  Some contractors have also reported disruptions in offices that should be open as they have their FY’19 funding.

Allen Federal continues to predict that the partial shut-down will last at least until the end of January.  Financial markets, contractors, federal employees, and – importantly – those who depend on government programs such as SNAP, will begin to be seriously impacted after that time.  Once that happens, pressure will only grow on Congress to develop its own solution, with or without White House support.