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F.C.-Based Government Contracts Law Firm: ‘Clients Worried About Impact of Shutdown’

A Falls Church-based government contracts law firm told the News-Press today that clients are “not being given guidance” from the federal government about the standing of their contracts and their work if, in fact, the government shuts down tomorrow.

A Falls Church-based government contracts law firm told the News-Press today that clients are “not being given guidance” from the federal government about the standing of their contracts and their work if, in fact, the government shuts down tomorrow.

Janine Benton, a principal of the law firm Benton, Potter, Murdock, noted that lacking formal guidance, contractors are scouring documents such as the February 2011 Congressional Research Service report, “Shutdown of the Federal Government: Causes, Processes and Effects.”

According to the report, “When federal agencies and programs lack appropriated funding…under the Anti-Deficiency Act, they must cease operations except in emergency situations,” citing the 21-day government shutdown at the end of 1995 as an example. The report notes than in the event of a shutdown, the Office of Management and Budget (OMB) “provides agencies with annual instructions on how to prepare for and operate during a funding gap in ‘Circular No. A-11.’ The circular cites the two Civiletti opinions and the 1995 OLC opinion as ‘background’ and ‘guidance.’ The circular establishes two ‘policies’ regarding the absence of appropriations: (1) a prohibition on incurring obligations unless the obligations are otherwise authorized by law and (2) permission to incur obligations ‘as necessary for orderly termination of an agency’s functions,’ but prohibition of any disbursement, i.e. payment.”

It directs agency heads to develop and maintain shutdown plans. Excepted activities and personnel, according to the report, are those which provide for the following: (1) national security, including the conduct of foreign relations essential to the national security or the safety of life and property, (2) benefit payments and the performance of contract obligations under no-year or multi-year or other funds remaining for those purposes, (3) conduct of essential activities to the extent that they protect life and property. Defined as such “essential activities” are (1) medical care of inpatients and emergency outpatient care, (2) activities essential to ensure continued public health and safety, including safe use of food and drugs and safe use of hazardous materials, (3) continuance of air traffic control and other transportation safety functions and the protection of transport property, (4) border and coastal protection and surveillance, (5) protection of federal lands, buildings, waterways, equipment and other property owned by the U.S., (6) care of prisoners and other persons in the custody of the U.S., (7) law enforcement and criminal investigations, (8) emergency and disaster assistance, (9) activities essential to the preservation of the essential elements of the money and banking system of the U.S., including borrowing and tax collection activities of the Treasury, (10) activities that ensure production of power and maintenance of the power distribution system, and (11) activities necessary to maintain protection of research property.