The federal government shut down at midnight on October 1 after Congress failed to reach a funding agreement. While critical services like Social Security and mail delivery continue, the shutdown will likely disrupt contract payments, tax processing, and other federal services that many HVACR contractors rely on.
In March, Congress narrowly avoided a shutdown by passing a continuing resolution that funded the government through September. This time, lawmakers couldn’t reach a similar agreement before the deadline, and the government has now entered its first shutdown since 2018.
How the shutdown affects HVACR contractors
For contractors working on federal projects, a shutdown could disrupt several aspects of your business:
- Contract payments and invoicing will be delayed. Federal payment offices operate with reduced staff during shutdowns, slowing invoice processing and payment timelines. Even fully funded contracts can face delays because fewer staff are available to process paperwork.
- Project timelines could stall. If your contract requires federal facility access or oversight from furloughed government personnel, work may need to pause until the shutdown ends.
- Tax return processing will slow. If you haven’t received your refund yet or filed for an extension (the deadline without penalties is October 15), expect delays. The IRS maintains limited operations during shutdowns, which means slower refunds and processing of tax-related documents.
- SBA loan approvals are on hold. The Small Business Administration typically stops processing new loan applications during shutdowns, limiting access to working capital.
- Workforce development programs may pause. Federal funding for apprenticeship programs and workforce training initiatives could face delays.
- Federal rulemaking pauses. Any pending regulatory actions — including those related to energy efficiency programs or equipment standards — will be delayed until the government reopens.
What you should do now
If you have federal contracts or depend on federal services, take these steps to protect your business:
- Contact your contracting officer immediately for guidance on how the shutdown impacts your current or upcoming projects. Each contract may be handled differently based on its funding source and requirements.
- Review your contracts for stop-work clauses and prepare for possible delays in project schedules and payment processing.
- Submit any outstanding invoices as soon as possible to get them into the payment queue before offices become unavailable.
- Communicate with customers about potential delays in federal rebates, tax credits, or other incentive program processing.
- Monitor your cash flow closely and consider whether you need to adjust payment terms with suppliers or access credit lines to manage potential payment delays.
What’s next
There’s no clear timeline for how long the shutdown will last. ACCA is monitoring the situation closely and will provide updates as negotiations continue. Contractors should prepare for potential disruptions and maintain open communication with customers, suppliers, and contracting officers.
For questions or to stay informed, contact ACCA’s Government Relations team at govt@acca.org.
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