Defense contractors received some clarity into the shutdown plans for the Department of Defense/War (Department) when the Department released a memo outlining its contingency plans during this lapse in funding. 

Initially, the Department noted that of its 741,477 civilian employees, approximately 400,000 would be exempted from the shutdown because they are funded by something other than annual appropriations or are necessary to protect life or property. Similarly, not all contracts will be curtailed, depending on the circumstances. Some notes from the memo:

• Contracts awarded prior to a lapse in funding may continue to be performed so long as there are obligated funds left on the contract unless the contract requires access to government facilities, “active administration” by Department personnel, or use of government resources that would cause the Department to incur additional obligations.
• New contracts, exercise of options, issuance of task orders, and contract extensions are prohibited unless they support an excepted function.
• New contracts and extensions may be issued if supporting an excepted function. The Department notes that this is “where delay in contracting would create an imminent risk to the safety of human life or the protection of property, including endangering national security.”

In the memo, the Department provides some examples of activities and functions that would continue to function in the event of a shutdown. Those include:

• national security including military and contingency operations, intelligence operations, repair of equipment to support excepted activities, and military support to enforce treaties;
• medical/dental care including inpatient care, acute and emergency outpatient care, private care under TRICARE, and veterinary services supporting excepted activities;
• acquisition and logistics support including contract administration (such as payment) for contracts funded with prior year funds, activities required to support the Feed and Forage Act (such as clothing, storage, food, etc.);
• legislative and public affairs support including Armed Forces Network and legislative affairs activities supporting excepted activities;
• education and training in support of excepted activities; and
• financial management activities including controlling funds and obligations incurred supporting excepted activities.

The list provided by the Department is much longer and is worth reviewing, particularly for contractors with prime contracts or subcontracts with the Department. For further information to deal with the ongoing shutdown, please visit our previous blog post on this topic.