On Saturday, September 27, 2025, the U.S. Department of Defense (DOD) issued Contingency Plan Guidance (the “Guidance”) providing for limited continuity in operations should the federal government shut down this Wednesday, October 1, 2025. With proper planning, DOD contractors can better manage a shutdown’s impacts on their finances and operations.

Here are 5 Practical Steps for Defense Contractors during a Shutdown:

  • Analyze all contracts. The Guidance affects contracts differently depending on the status of funding obligations, availability of options, or reliance on government facilities, personnel, or resources. Assessing the status of each contract will allow you to communicate most effectively with the government and identify opportunities to mitigate adverse impacts.
  • Coordinate with your Contracting Officers (KOs). Your KO may have specific contingency plans for contract oversight, so make sure to have a clear communications plan in place for obtaining any necessary approvals and determining excepted activities under your DOD contracts. Contact your KOs as soon as possible to determine whether your projects fall within excepted activities or whether there is the potential for Stop Work Orders, terminations, or other adverse actions.
  • Document Everything. Document all KO-related correspondence and familiarize yourself with the excepted activities found in the Guidance (see pages 10-16) to continue contract performance. Keep detailed records of work performed, timekeeping, employee expenses, and any other contractual requirements to report on when normal government functions resume. Contractors should also document efforts to minimize costs and any time or resources spent winding down or resuming a contract. This information could be critical in the event of a Stop Work Order or termination.
  • Plan to absorb potential effects on payments and awards. Without any funds to obligate to future contracts, contract awards may come to a standstill. And even if an exception applies, the government may furlough or reduce the number of employees responsible for solicitation development, bid or proposal evaluation, and contract awards. Be prepared to navigate uncertainty and absorb delays in future contracting opportunities.
  • Anticipate the resumption of government operations. Eventually, Congress will end the stalemate and pass a budget. Federal employees will pick up where they left off. Before, during, and after any shutdown, contractors should assume that all deadlines—including those related to proposal submission, bid protests, appeals, and any other litigation—remain unchanged. Staying on top of timing requirements will allow a more seamless resumption of operations once the government reopens.

Fluet’s Government Contracts Practice routinely supports contractors in managing risk, navigating regulatory exposure, engaging with the federal government, and confronting post-award challenges. Contact us today to discuss how our proven capabilities can enhance federal contracting operations and outcomes.