The government shutdown was ended on October 16th by implementation of a continuing resolution to fund the government until January 15, 2014 (H.R. 2775). Everyone breathed a sigh of relief and all federal workers returned to the workplace. That is all well and good but does this mean business as usual? How will this affect the small businesses across the country that are known as government contractors? The question that most small businesses are asking is how it affects them and if it will cause a disruption in either business as they have known it or will it disrupt their cash flow?
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We have to ask ourselves what some of the underlying causes of the government shutdown are. Certainly there is the debate about the health care plan, but that is too obvious. The counter argument is all about the budget and about the spiraling federal deficit. Even the argument about the health care is deeply rooted in the budget talks (can the government afford this program?). So, when you combine the effects of Sequestration from earlier this year (which continues into 2014 by the way) with the current squabble over the budget and deficit, will this find its way to the business sector outside of government? My immediate concern today is with the pool of government contractors and whether or not they would be faced not only a crippling reduction of cash flow but possible contract termination. I don't know how many contractors know the process for termination for convenience of a government contract. I will try to summarize that here.