Frequently Asked Questions Follow-Up: What Contractors Should Know As The Government Reopens

With the government shutdown officially over and government operations resuming, contractors face critical decisions about restarting work, managing compliance, and protecting their contractual rights.

Timely action can help avoid delays, preserve claims, and ensure smooth performance. As a complement to our Update published at the beginning of the shutdown, below is a set of frequently asked questions designed to provide contractors with practical guidance for navigating this transition period.

• What should I do when the government reopens?
• How should I resume work after the shutdown?
• Can I submit claims for costs incurred during the shutdown?
• What about invoices and payments delayed during the shutdown?

1. What Should I Do When the Government Reopens?

Contractors should:

• Reconnect promptly with the contracting officer (CO).
• Carefully review any guidance, instructions, or contract modifications provided.
• Confirm restart procedures and verify any changes to timelines, including revised schedules, extensions, or funding adjustments.
• Review contract changes, such as whether options were exercised, modified, or canceled during the shutdown.
• Address any scope changes to determine whether the work has been reduced, expanded, or otherwise modified.
• Document every communication thoroughly to support audits and potential claims.
• Stay current on any new Federal Acquisition Regulation (FAR) or regulatory changes.

Contractors should pay close attention to any contract changes during this shutdown in particular because the government reallocated funds to cover other priorities, which may have led to significant changes in both new and existing contracts. Contract changes made during the shutdown may allow the contractor to seek an equitable adjustment or file a claim under the Contract Disputes Act (CDA) to recover costs or negotiate new terms.

Contractors should also monitor FAR reform initiatives, especially the General Services Administration's Revolutionary FAR Overhaul project and sunset clauses for outdated provisions. FAR updates effective October 2025 include streamlined procedures for commercial products and services (FAR 12.203) and revised contractor quality responsibilities (FAR 46.105). Agencies are implementing these changes as class deviations and removing outdated clauses.

2. How Should I Resume Work After the Shutdown?

Contractors should resume work in a structured and systematic way by:

• Prioritizing critical tasks that were delayed during the shutdown, if appropriate for your contract.
• Communicating with subcontractors to align on restart plans and flow down any new requirements from the CO.
• Keeping detailed records of restart activities to support potential claims or equitable adjustments.

3. Can I Submit Claims for Costs Incurred During the Shutdown?

Yes. Contractors may submit claims for allowable costs, such as idle labor or demobilization expenses. Contractors can potentially recover costs, under certain FAR clauses, for the following categories: standby labor, restart costs, subcontractor pass-through costs, and schedule disruption expenses. However, recovering these costs requires thorough documentation, and the review process takes time. Our prior Update provides additional details about recoverable costs and documentation (see responses 5 and 6).

Further, as we briefly discussed in our prior Update (see response 8), there are several mechanisms for recovering shutdown-related costs. If the financial impact is significant, it is typical to start with a Request for Equitable Adjustment (REA), which can allow for negotiated relief without escalating to litigation. If an REA fails, contractors may consider converting the REA into a claim under the CDA. A CDA claim triggers formal timelines and preserves a contractor's right to appeal to a board of contract appeals or the Court of Federal Claims. Maintaining contemporaneous records—daily logs, CO communications, and subcontractor invoices—is critical to support either approach.

Importantly, under the FAR Stop-Work Order clause (FAR 52.242-15), contractors must assert any claim within 30 days after the stop-work order is canceled or expires or, at the latest, before final payment. For the Suspension of Work clause (FAR 52.242-14), which is more typically used in construction contracts, claims should be submitted as soon as practicable but no later than final payment.

Contractors should also be prepared to demonstrate that any incurred costs being claimed are allowable and related to the shutdown, as discussed in our prior Update (see response 9).

4. What About Invoices and Payments Delayed During the Shutdown?

Contractors should submit any pending invoices immediately and confirm receipt. Contractors should also track payments closely and keep in mind that if delays occur, they may be entitled to interest under the Prompt Payment Act (PPA). This is treated differently depending on whether the invoice was accepted before or after the shutdown.

If the government accepted a proper invoice before the shutdown, the 30-day PPA clock starts from that acceptance date. If payment becomes overdue during the shutdown, interest accrues for every day past the due date—even while the government is closed. For example, a proper invoice accepted on September 23, 2025 (before the October 1, 2025, shutdown) would be due for payment by October 23, 2025, so interest begins accruing from October 24, 2025, until payment is made.

If your invoice was submitted before or during the shutdown but not accepted until after reopening, the clock does not start until acceptance occurs. Interest accrues only after 30 days from the acceptance date, regardless of when you originally submitted the invoice. For example, a proper invoice submitted on September 25, 2025 (before the October 1, 2025, shutdown) and accepted on November 10, 2025, would be due for payment by December 10, 2025, so interest accrues starting on December 11, 2025, if it remains unpaid.

If a contractor determines they are owed interest under the PPA, the contractor should confirm the acceptance date of the invoice and calculate the interest owed using the U.S. Department of the Treasury's published rate. Then, the contractor should notify their CO in writing with the invoice details and interest amount. If interest is not paid within 10 days, the contractor may submit a formal written demand that the agency pay an additional penalty (capped at $5,000) due to not providing the late payment interest already owed. Contractors can also escalate through the CDA process if necessary.

Key Takeaways

• Reengage promptly with the CO or the prime contractor and review contract details.
• Continue to maintain thorough records to preserve rights and support claims.
• Monitor important deadlines and regulatory changes.

By addressing transition issues proactively, contractors can minimize risk, maintain compliance, and position themselves for success as government operations return to normal.

These FAQs are intended as general guidance; contractors should evaluate contract-specific terms and consult counsel for tailored advice.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.