Thriving in the Downtime: A Practical Guide for Government Contractors During a Shutdown

By Stacey Piper

For many of us in the federal contracting community, this moment feels heavier than just a headline. This is on top of what has already been a difficult year for many. Contracts may be on hold, payments may be delayed, and points of contact may be furloughed or worse. It’s disruptive and frustrating. If you live in the DMV (D.C., Maryland, Virginia) like me, even if you haven’t been personally affected, you know someone who has—a spouse, family member, neighbor, or friend.

Not the First Time & Won’t Be the Last

First, let’s remember we’ve weathered these storms before. You’ve got this, and you can use this lag time to your advantage, if only to build resiliency for the future and be better prepared for the next time.

Historical Context of U.S. Federal Government Shutdowns
Year(s)	Administration	Duration	Furloughed Workers (Approx.)
1995-1996	Bill Clinton	21 days	280,000
2013	Barack Obama	16 days	800,000
2018	Donald Trump	3 days	~700,000
2018-2019	Donald Trump	35 days	~800,000

“The advantage of working for the federal government is continuity,” says Dr. Dennis McBride, president emeritus and fellow of the Potomac Institute for Policy Studies. “Generally, there is more stability in government contracts, and these disruptions are few and far between. This may look like a problem, but this is an opportunity to review your contingency plans and return to staff development without the distraction of serving clients.”

As a fractional CMO, I see shutdowns as both a challenge and an opportunity. Disruption forces clarity, and those who stay visible and helpful now will emerge stronger later.

Practical Strategies for Government Consulting Firms

A federal government shutdown presents significant challenges for government consulting firms. However, with the right strategies and tactics, it’s possible to sustain the organization and even find new opportunities. The key is to be proactive, prepared, and flexible.

Here are some tactics and strategies for government consulting firms during a federal government shutdown.

Financial and Operational Resilience

• Review Your Contracts: Immediately scrutinize all your contracts. Determine which are “fully funded” versus “incrementally funded” and which are for “essential” services. This analysis will help you identify which projects are most at risk and which can likely continue. If you have client-facing staff sitting idle and nonbillable, consider utilizing them to identify and research contracts that fit your wheelhouse and are stable/essential to compete for during the next award cycle.
  
  
• Forecast Cash Flow: Assume that invoice processing and payments will be delayed. Prepare for a disruption that could last at least 30 days. Maintain a reserve of operating expenses to manage this period. If needed, establish lines of credit beforehand. Consider going beyond your bank to explore alternative working capital credit funding options for government contractors such as Republic Capital Access or SouthStar Capital that offer invoice factoring and accounts receivable solutions.
  
  
• Diversify Revenue Streams: A shutdown highlights the risk of relying solely on government contracts. Use this time to research and develop business in the commercial sector or with state and local governments (SLED) using AI-powered aggregators like Bidscope.ai to discover and track opportunities. Go a step further and start rewriting your past performance to align with the language and sentiment of these new opportunities.
  
  
• Manage Your Workforce: Instead of furloughing or laying off employees, consider short-term alternatives. Reassign them to projects that are not affected by the shutdown or to internal initiatives like business development, content development, training, or process improvement.

Communication and Documentation

• Communicate with Contracting Officers (COs): Start by contacting the CO for each of your contracts. Request written guidance on whether your work should continue, and who has been designated as “essential” personnel. Be prepared to justify how at least some of your work should be deemed essential. Even 50% of your contract during a shutdown could make all the difference in your financial health and workforce stability.
  
  
• Document Everything: This is critical for potential cost recovery. Keep a meticulous record of all communications and create a separate accounting code to track all shutdown-related costs. This is essential for submitting requests for equitable adjustments (REAs) or formal claims once the government reopens. Contact your tax advisor about how you might claim these expenses at the end of the year.
  
  
• Protect Your Rights: Do not work “at risk” without a clear, written directive from an authorized government official. Review your contract regarding “excepted” work and, when in doubt, seek legal counsel who specialize in government contracts. While you want to maintain a good relationship with your client, if you perform work that is not part of an “excepted” activity or a pre-funded contract, the government is not legally obligated to reimburse you for those costs. While Congress has historically provided back pay for federal employees, contractors do not have the same guarantee. If you’re a prime contractor, maintain clear communication with your subcontractors and issue a stop-work order if you receive one so you aren’t on the hook to pay them.

Provide Value and Seize Opportunities

• Be a Trusted Advisor: During this time of uncertainty, your clients need guidance. Position your firm as a source of information and stability. Take caution not to be tone deaf in your communication, and know that there are tens of thousands of people in your target audience who are directly affected and hundreds, if not thousands, of other businesses who support the federal government who are also feeling the trickle-down effects.
  
  
• Invest in Your Team: Use the downtime for employees to train on new skills, complete certifications, explore professional memberships and societies, and engage in internal company initiatives such as a community service project in support of your Corporate Social Responsibility (CSR) program. Consider changing the cycle of your workforce’s mandatory compliance training so that billable staff can use their time for something they will need to do annually regardless.
  
  
• Update your communications presence: Be proactive to develop a “bank” of thought leadership content to pull from when things open back up. Perform a digital audit and ensure your website and other marketing assets reflect who you are today, not who you were years ago. And remember, half of your web visitors are candidates. Your culture and employer brand matter as much as your capabilities. Task your thought leaders and solution architects with drafting fresh content while they are underutilized or non-billable. Consider refreshing or developing webinars. Design a survey to conduct primary research that can be used for business intelligence or market development.
  
  
• Keep your company pages active. Silence can be seen as instability. Continue to share your perspective, your lessons learned, and your optimism. Share industry articles and resources for furloughed Federal workers as well as for the greater GovCon community. Being seen as a market leader isn’t about selling; it’s about driving the conversation forward and contributing the to industry conversation.

Prepare for the Post-Shutdown Surge

• Focus on Budget Planning & Business Development: With normal government operations on hold, this is a prime opportunity to focus on long-term business development and shift FY26 planning earlier. Consider hosting a key stakeholders meeting to reevaluate your mission and vision, and brainstorm topics of importance to key customers and agencies. You will be poised to help clients meet their priorities and agency/program mission once the budget for FY26 is passed and normal operations resume.
  
  
• Identify Post-Shutdown Priorities: Agencies will have an urgent need to catch up. Use the downtime to prepare proposals for this anticipated surge in activity. Having proposals ready will give you a significant advantage.

Don’t Go Dark When the Government Does

I know it’s tempting to pause and wait this out. But when the shutdown ends—and it will end—there will be a SURGE of activity. Agencies will be racing to catch up, and the companies that stayed visible will be the ones at the top of their minds.

My encouragement to every GovCon leader is to choose two or three small things each week. Refresh a page on your website. Post something helpful. Respond to a review. Shine a light on your people. This isn’t about chasing contracts that can’t move. It’s about keeping your brand visible, your voice steady, and your team engaged. Do this consistently, and by the time Washington is fully back in motion, you’ll not only look stronger—you will be stronger.

If there’s one thing I’ve learned leading through uncertainty, it’s this: government contractors can’t afford to shutdown when the government does. Even now (especially now), people are still paying attention. Federal employees, contracting officers, partners, peers, and candidates are still scrolling LinkedIn, still reading industry news, and still noticing who is showing up (and who isn’t). And investing time and energy into strengthening your financial resilience won’t just help you now, it will help you be better prepared for the next federal government shutdown (or COVID-19, or any other event that is out of your control).

By implementing these strategies, government consulting firms can navigate the challenges of a shutdown, mitigate financial risks, and position themselves for a successful and rapid recovery. We’ve weathered disruptions before. We’ll weather this one, too. The key is not just to endure it, but to use it to build momentum for what’s next.