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The Effect of the Government Shutdown on GSA

The government shutdown has forced the General Services Administration (GSA) to furlough most of its workforce and provide limited levels of service to agency clients.  GSA has about 11,821 employees, and according to GSA’s shutdown plan, only about 4,094 will continue working during a lapse in appropriations.

Impact on the Federal Acquisition Service

The GSA Federal Acquisition Service (FAS) is funded by the industrial funding fee and other fees assessed on sales under GSA contracts and not by direct appropriations.  Consequently, during a partial federal shutdown the agency will not immediately furlough FAS employees, but as its cash reserves begin to fall, it will reduce its staff proportionately, according to the GSA Administrator.  Employees are retained to provide the support necessary to enable government agencies to perform certain activities during a lapse of appropriations.  The amount in GSA’s revolving fund will clearly be impacted should the shutdown continue for a period of time.  Many of the people we have contacted at GSA since the shutdown began were working, but this is expected to change if the shutdown continues.  GSA has said its phased shutdown of the acquisition service could take up to 25 business days.

The Office of Management and Budget (OMB) requested federal agencies to provide details about their contingency plans in the event of a government shutdown.  Federal News Radio has assembled this information and made each agency’s Federal Agency Shutdown Plans available to the public.

The GSA Order on Operations in the Absence of Appropriations states that the agency will not make payments to contractors for products and services not obligated before the funding lapse.  Consequently, we expect that contractors will be paid for products and services obligated on or before September 30, 2013, but that new contracts that rely on appropriated dollars will not be awarded.  FAS advises vendors to contact their respective GSA Contracting Officer with any questions related their company’s specific contract.  You can also contact BH Sky Associates directly for more information.

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