2025 Contractor’s Guide to Preparing for a Government Shutdown

Summary: With a potential Government shutdown on October 1, federal contractors face real risks, from halted funding and delayed payments to operational disruptions and workforce uncertainty. Proactive planning is key: create a shutdown strategy, maintain open communication with Contracting Officers, and document every step. Businesses that prepare now can reduce financial strain, stay compliant, and position themselves for a stronger recovery when operations resume.

In anticipation of a potential Government shutdown in October 2025, it is time to create your plan of action. If Congress does not pass the budget, the length and ramifications of a Government shutdown will be difficult to predict. What can be predicted is that a shutdown will adversely affect your Government contracting business.

A shutdown could still be averted, or it could be of such a short duration that it is only a minor inconvenience. However, with so much at stake and given the current political climate, it would be prudent for Government contractors to assume a shutdown will happen. Though many things are unknown, history has shown us that Government shutdowns can be as lengthy as 35 days or as brief as one day. Contractors who have made preparations will suffer less than their unprepared competitors. Toward that end, Aprio recommends that Government contractors develop a “shutdown contingency plan.”

Unfortunately, there is not a single “one size fits all” approach to dealing with a shutdown. The Federal Acquisition Regulation (FAR) and the corresponding FAR clauses do not specifically address the contractor’s rights and obligations in the event of a Government shutdown. The appropriate course of action must be determined on a contract-by-contract basis based on the totality of the circumstances. In other words, the shutdown contingency plan must address each contract individually.

The purpose of this brief is to provide contractors with guidance on how to prepare for and respond to a shutdown. We outline a general description of how the shutdown will likely affect Government contracting. We also list a variety of factors that contractors need to consider in determining how the shutdown will specifically affect them. Finally, we offer some possible actions that contractors should take to minimize, if not avoid, the adverse consequences of a shutdown.

How we can help

Aprio’s experienced Government Contracting and nonprofit CPAs provide stop-work order assistance, government contract termination support, and Request for Equitable Adjustment (REA) services to help government contractors navigate the complexities of government funding freezes.