Government Shutdown Cash-Flow Survival Plan

The federal government shutdown has frozen payments, halted task orders, and paused awards, leaving small and mid-sized government contractors (GovCon) facing acute liquidity risks. Hope is not a strategy—you need a plan now.

This episode breaks down a practical, step-by-step 14-day cash-flow survival strategy to help your firm weather a federal funding freeze and keep your business afloat.

We’ll guide you through the critical steps necessary to survive the shutdown, protect your employees, and ensure your post-shutdown rebound is successful:

• Immediate Financial Triage (Days 1–2): Learn how to run a 14-day burn-rate analysis, assess cash and receivables, and prioritize critical obligations like payroll, benefits, and essential fixed costs first.
• Revenue Management (Days 3–5): Discover how to aggressively push invoices immediately, early-bill for earned work, and coordinate with contracting officers (COs) to get every lawful dollar into the payment queue.
• Securing Short-Term Funding (Days 6–8): Explore how to utilize existing bank lines of credit (or call your banker immediately to set one up). We also discuss how SBA Disaster Loans are an exception and remain available even while standard 7(a) and 504 programs are frozen.
• Strategic Cost Mitigation (Days 9–11): Understand how to freeze all discretionary spending (like travel, marketing, and new hiring) while preserving must-pay items necessary to maintain performance capability and avoid CPARS risks (e.g., insurance and IT services). We also discuss maximizing workforce value by using accrued leave or reassigning idle employees to internal tasks like R&D or audits.
• Planning for the Long Haul (Days 12–14): Learn to model different shutdown scenarios (2-week, 4-week, 8-week), set objective cash triggers for austerity steps, and maintain detailed logs of all costs and communications for future claims.
• Recovery Readiness: Be prepared to reactivate staff immediately when funding returns, and—critically—file your equitable adjustment or delay claims promptly, as contractors often have only a narrow 20–30 day window to submit cost recovery requests after funding resumes.

Cash flow is king, and this plan is essential for firms relying on government contracting certification, including those with 8a contracts, SDVOSB, or WOSB set-asides.