What Contractors Need to Know About Stop-Work Orders During a Shutdown (and How to Protect Your Business)
The 2025 government shutdown is in full swing, and if you're a small or mid-sized federal contractor, chances are you've either received a stop-work order or you're anxiously watching your inbox. The question now isn’t whether the shutdown will impact you, it’s how you respond that will determine how much damage (or opportunity) you face.
Here's what just happened, what it means for your contracts, and what you need to do next to safeguard your business, recover costs, and stay in the game.
The Situation: Stop-Work Orders Are Flying, Here’s What That Actually Means
Federal agencies are issuing stop-work and suspension orders across a wide range of contracts. Under FAR 52.242-15, a stop-work order halts performance (typically for up to 90 days) while the government decides whether to resume or terminate. It’s often used for service, supply, and R&D contracts. If you’re in construction, you might instead receive a suspension of work under FAR 52.242-14, which doesn’t have a fixed time limit but may entitle you to cost recovery for unreasonable delays.
Importantly, this is not a termination, not yet. Your contract is still active. You’re being told to pause, not pack up. But the clock is ticking, and how you manage this pause could make or break your future recovery.
Why It Matters: This Isn’t Just Legal Jargon, It’s About Cash Flow, Claims, and Compliance
Here’s the short version: if you don’t follow the right procedures now, you may permanently lose your chance to recover costs later.
For example:
A stop-work order allows for profit recovery if work resumes. A suspension does not.
You typically have 30 days after the stoppage ends to request an equitable adjustment for a stop-work situation.
If you don’t track costs separately, you may not be able to claim them.
Unauthorized work during a stop period? Not reimbursable.
For small businesses navigating tight margins and thin reserves, missing a notice deadline or failing to notify subs can be catastrophic.
What You Should Do Now: A Contractor’s Playbook for Surviving the Shutdown
Cease work immediately and acknowledge the order in writing. Don’t assume you can keep working on unaffected tasks without explicit guidance.
Notify your subs and vendors. As the prime, it’s your duty, not the government’s, to flow down stop-work instructions. Get it in writing.
Secure government property and data. From laptops to project sites, your safeguarding obligations don’t go away. Document everything.
Set up separate cost tracking. Use new charge codes to isolate all shutdown-related expenses. Labor standby time, demobilization, extra security, track it all in real time.
Stay in contact with your CO. If your contracting officer is furloughed, document your attempt to reach them. Keep a running log of communications.
Document the work’s condition. Photos, videos, inventory counts, this prevents future disputes and supports remobilization claims.
Prepare for your REA. A Request for Equitable Adjustment is your tool to recover added costs. Get your documentation ready and mark your calendar for submission deadlines.
Don’t Forget the Big Picture: Risk, Recovery, and Resilience
Yes, this shutdown is frustrating, but it’s also a litmus test for your resilience. Contractors who weathered the 2013 and 2018–19 shutdowns successfully had one thing in common: they documented early, acted fast, and communicated clearly.
Here’s how to go beyond basic compliance and build long-term durability:
Review your FAR clauses now. Know whether you’re under a stop-work, suspension, or heading toward a termination. Each has different remedies and risks.
Plan for workforce impacts. Use furloughs, cross-training, or assign staff to SLED or commercial work. Be mindful of labor laws like the FLSA and WARN Act.
Secure liquidity. Line up bridge financing or invoice factoring. Chase down receivables and watch indirect costs.
Keep your subs close. Communicate your status, delay payments transparently if needed, and help them track their own shutdown costs.
Preserve your rights. Submit written notice of excusable delays, equitable adjustments, and cost claims on time. No notice = no money.
A Shutdown Can Derail You, or Differentiate You
For small businesses with 8a certification assistance, women business certification, or disabled veteran small business certification, this moment is a stress test, and a chance to stand out. Contracting officers remember the firms that communicated clearly, stayed prepared, and resumed work without drama.
If you’ve been working on your sba 8a certification or exploring government contracting certification, this is your time to show that you’re not just certified, you’re strategic.
Make sure your house is in order:
Align your contractor NAICS code with agency priorities
Know your recovery rights under the FAR
Consider 8a contracts services or SBIR grant assistance as a bridge to non-impacted work
Want More Shutdown Survival Guidance?
If this topic hits home, you’ll want to read our deeper dive: 2025 Government Shutdown Survival Guide for Business Owners: How to Protect Your Contracts and Cash Flow
It’s packed with tips for preserving capital, diversifying revenue, and communicating with your CO when the phones go silent.
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