My honest thoughts on the government shutdown · Government Contracting School

Oct 29 • General

My honest thoughts on the government shutdown

You’ve been reading about it, watching it on the news, probably been hearing your peers talk about it: the government shutdown. Here’s why it’s not a factor (if you do business with DLA)

Prior‐year or multi‐year funding already obligated

If a contract is already awarded and funded (or fully obligated) before the lapse in appropriations, it may continue. For example: “A contractor performing under a contract (or contract option) that was awarded prior to the expiration of appropriations may continue to provide contract services … up to the limit of the funds obligated on the contract prior to the lapse in appropriations.”

This means if DLA or the parent department had appropriated funds prior to the shutdown and placed them on contract, performance and execution may continue even if Congress hasn’t passed the new annual appropriation.

Essential / excepted activities

Under the Antideficiency Act and related guidance, agencies may continue activities that are expressly authorized by statute, or that are “necessary to the discharge of the President’s constitutional duties,” or involve protecting human life or property.

In the defense/logistics context, this can include critical supply chains, readiness, logistics for military operations, etc. The DOD guidance lists contracting, contract administration, logistics operations in support of excepted activities as potentially continuing.

Contract awards made just before or during lapse under particular authorities

Some contract activity may be allowed if funded from prior year or “no-year” funds, or under statutory exceptions (for example, the Feed and Forage Act).

If you examine solicitations / contracts you can see the funding year in the middle of the number for instance SPE4A6-25-T-Q086.

Why You Might Still Win Today

Even during a shutdown, DLA may still issue or complete certain awards because:

Funds from prior appropriations are available (multi-year or “no-year” funds);

The program is an “excepted activity” (e.g., national defense logistics);

Or obligation authority for that specific account or line item already exists (for example, Working Capital Fund dollars, which DLA uses heavily and are revolving funds, not dependent on annual appropriations).

DLA’s Working Capital Fund (DWCF) allows it to continue procurement operations—including contract awards—since those funds are reimbursable and not directly tied to annual appropriations.

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