When the government shuts down, contractors’ cash flow on federal sites does too. The federal government shut down on Oct. 1, freezing activity on a number of construction sites. Attorneys say these shutdowns double as a stress test for how well construction firms document and negotiate their federal contracts. During funding lapses, even short ones, the line between work continuation and work stoppage blurs. For some firms, that can mean weeks on site that go unpaid. For others, it’s a crash course in which clauses actually protect them when government operations grind to a halt. If a project’s funding was appropriated before the fiscal year began, work can usually continue, albeit with slower payment cycles. But if funds were not secured before the cutoff, “it will go dark for the foreseeable future because no funds are available during the shutdown,” said Rippeon. That uncertainty often extends to subcontractors too. Contractors who fail to flow down stop-work or suspension clauses to their subs risk being squeezed between the government and their project partners, said Michael Barnicle, partner at Atlanta-based Troutman Pepper Locke.

https://www.constructiondive.com/news/how-government-shutdown-impacts-construction-contracts/803961/