Document Everything, Recover More: How to Build a Shutdown REA That Actually Pays Off
If you’re a small or mid-sized federal contractor still trying to dig out from the 2025 government shutdown mess, here’s some straight talk: filing a solid Request for Equitable Adjustment (REA) could be the difference between recovering real dollars and eating the loss. But if your documentation isn’t airtight, don’t expect the government to hand over a dime.
A new playbook for SMB GovCons just dropped, and it outlines exactly how to document shutdown-related costs in a way that meets FAR standards and actually gets attention from contracting officers. Whether you're in construction, IT services, or professional staffing, this is required reading if you’re eyeing compensation for stalled projects, idled workers, or frozen funding.
Here’s what it says, and how you can turn it into action right now.
What’s an REA, and Why Should You Care?
A Request for Equitable Adjustment (REA) is how you ask the government to pay up when their delays or actions, like a stop-work order or a furloughed contracting officer, cause you to lose time or money. It’s not a formal claim under the Contract Disputes Act, which means it’s a lower-pressure, often faster path to resolution. You can still go the CDA route later if needed, but an REA is your first and most flexible tool.
For small businesses, it’s often the smarter play. You can use it while the contract is still active, and in many cases, you can recover legal fees if you’re not just setting the stage for a claim.
Here’s the Catch: It’s All About the Paper Trail
The playbook breaks it down into 10 actionable steps, but the key theme is crystal clear, document everything in real time. If you’re trying to recover shutdown-related costs weeks or months after the fact with vague notes and loose numbers, you’re sunk.
Start by identifying what triggered the disruption. That might be:
A formal stop-work or suspension order
Furloughed COs, CORs, or inspectors who left you in limbo
Closed federal facilities that blocked access or deliveries
Delayed approvals or unpaid invoices
“No funding” status where the agency ran out of budget mid-performance
These are all valid triggers for REAs, but only if you kept receipts.
Why It Matters to SMB GovCons Right Now
For many small contractors, the 2025 shutdown wasn’t just an inconvenience, it was a cash-flow crisis. You probably had to cover idle labor, rental equipment fees, or subcontractors standing by with nothing to do. If you don’t track those costs accurately, you won’t get them back.
Even worse, if you didn’t send timely notices to your CO or COR, especially under clauses like FAR 52.242-14 or 52.242-15, you could lose your right to recover entirely. The deadline for notice? As short as 20 days from when costs were incurred.
And don’t forget: if you work under a construction contract or 8a contracts services agreement, the shutdown may have caused significant schedule slips. If you don’t log those delays against your original baseline schedule and explain why they happened, your REA won’t hold water.
How to Take Action Today
Use this as your 5-point internal checklist:
Inventory every impacted contract – Pull all relevant clauses (FAR 52.242-14, 52.242-15, 52.243-1, 31.201-2, etc.) and confirm what’s recoverable.
Track shutdown costs separately – Create dedicated cost codes in your accounting system for shutdown-related labor, subs, equipment, and overhead.
Document schedule delays with timestamps – Use project management tools to show the before-and-after of shutdown interruptions.
Log all CO communication – Save every stop-work order, missed approval, and email trail. If it’s not in writing, recreate it now.
Coordinate with subs – Make sure your subcontractors are also tracking and labeling shutdown costs, and get their invoices certified.
Need help? This is where consulting services like SBA 8a certification assistance and Government Contract Proposal Writing can support you. If you’re navigating the broader government contracting certification process or struggling with SBIR Grant Assistance documentation, now’s the time to loop in an expert.
What Happens Next?
Once you compile the documentation, your REA submission should be treated like a mini-claim package. That means:
A cover letter and summary
Detailed cost justifications with timesheets, logs, and annotated invoices
Supporting exhibits like change orders or facility closure notices
Optional certification, even if under $100K (to show good faith)
After submission, be prepared to negotiate. The contracting officer may push back, request clarification, or offer partial approval. Stay responsive and professional. If your REA is denied or ignored too long, you still have the right to escalate to a formal claim under FAR 52.233-1.
But if you’ve followed the playbook, especially the real-time documentation and cost separation, your chances of recovery go way up.
Final Thought: This Is a Test You Can Prepare For
The next shutdown (or funding gap or CO furlough) is coming, it’s just a matter of when. If you want to keep your 8a certification active, preserve your CPARS ratings, and stay in good standing for government contracting opportunities, this is your moment to tighten the process.
Building your REA muscle now also strengthens your team’s broader readiness for women business certification requirements, contractor NAICS code reviews, or disabled veteran government contracts, all of which require strong cost and performance tracking.
Need more help navigating REAs, 8a contracts services, or SBA 8a certification services? Our consultants at Squared Compass can guide you through the documentation maze.
Want to dig deeper into how shutdowns impact your pipeline and how to reposition your business? Read our related post: “Shutdown Fallout: Where Federal Contracting Is Frozen, and How SMBs Can Pivot Now”
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