Government Contracts Intelligence Briefing

Immediately prior to the lapse in funding on October 1, Department of Veterans Affairs (VA) and the Department of Homeland Security (DHS) released information on their contingency plans during the impending government shutdown, providing guidance to federal contractors.

Under both Departments’ plans, the vast majority of employees would be retained due to funding for their activities being financed by sources other than annual appropriations, or necessary to perform activities under the law or to protect life and property. The VA would retain over 446,000 of its 461,500 employees, while DHS would retain all but nearly 23,000 of its 272,000 employees. 

The VA’s guidance set out a comprehensive list of activities to continue during the shutdown, including:

• Medical services provided by the Veterans Health Administration, medical and prosthetic research programs funded by multi-year appropriations;
• Benefit programs, including education benefit processing, loan and insurance processing, Veterans Benefit Administration call center activities, compensation and pension claims processing, and other mandatory benefits programs;
• Office of Information Technology functions to support the VA’s network maintenance and protection, information security, and enterprise infrastructure operations to support other exempted functions or funded benefit programs; and
• The Office of Acquisition, Logistics, and Construction’s activities to provide services to protect Government property, policy and logistics, and major construction projects by the VA funded by other-than-annual appropriations.

The DHS’s coordinate memo set out specific guidance to federal contractors, describing the process by which the Department would consider contracting functions during the shutdown:

• DHS would incur no new obligations during the lapse in appropriations, including signing new contracts, extending existing contracts, or exercising an option for a contract unless already funded by appropriations that have not lapsed.
• Federal contractors with fully-funded contracts would continue operations unless access to furloughed employees or otherwise shut down government assets is critical to performance of the contract.
• DHS would reconsider contracts that are otherwise fully-funded if the activities are not statutorily required, authorizing relevant component heads in charge of the contract to take appropriate action so as not to waste taxpayer funding.

The DHS also described efforts to support the following functions among its highest priorities for consideration of whether to continue contracting functions:

• Operations to secure the U.S. Southern Border
• Middle East Operations
• “Golden Dome for America”
• Depot Maintenance
• Shipbuilding
• Critical Munitions

If a lapse in the contractual functions would negatively impact the above priorities, then DHS may fund such activities with funds that remain available, “excepting” such activities from the lapsed appropriations.

The guidance documents are much longer than what is provided here and should be reviewed by contractors with either prime or subcontracts with the VA or the DHS. For further general information on the ongoing government shutdown, please visit our previous blog post on the topic. For further information on the Department of War’s guidance memo for the ongoing government shutdown, please visit our previous blog post on the topic.