Sponsors (36)
The bill protects federal operations and contractor workers from an FY2026 funding lapse by enabling contract adjustments, backpay, and restored leave, but it does so by creating open‑ended spending authority and implementation discretion that raise fiscal, oversight, and timing risks for taxpayers and Congress.
Federal agencies and government contractors: agencies can adjust contract prices and draw on available funds to cover costs of an FY2026 funding lapse, preventing abrupt service disruptions and helping maintain ongoing operations.
Contractor employees who lost work or used paid leave during the lapse: will receive restored pay (backpay up to actual weekly pay, capped at $1,442) and restored leave balances, preserving income and benefits.
Government contractors and affected workers: agencies must reimburse contractors for eligible worker pay/leave regardless of contrary contract clauses, reducing legal disputes and speeding relief for workers.
All taxpayers and the federal budget: the bill creates open-ended, unspecified spending authority and requires additional payments to contractors (including backpay and price adjustments), increasing federal outlays and potentially raising the deficit or crowding out other priorities.
Taxpayers, federal employees, and Congress: automatic funding triggers and open reimbursement authority may reduce congressional control over appropriations timing and oversight.
Small and other contractors and their employees: agency discretion over acceptable evidence and unspecified implementation details could cause inconsistent decisions, delays, and cash‑flow burdens while contractors wait for reimbursements.
Based on analysis of 4 sections of legislative text.
Requires affected federal agencies to raise contract prices to reimburse contractors for documented employee pay and restored leave due to a FY2026 lapse, with a weekly cap and appropriations to cover costs.
Requires federal agencies that experienced a lapse in appropriations around Oct 1, 2025 (and any later lapse in FY2026) to adjust contract prices so contractors can be reimbursed for certain costs tied to that lapse. Reimbursable costs include wages paid to contractor employees who were furloughed, had reduced hours/pay, or used paid leave because of the lapse; weekly backpay is capped and agencies may pay only documented, reasonable costs. Provides funding authority from Treasury for fiscal year 2026 to cover those contract-price adjustments (funds remain available until Dec 31, 2026), and authorizes similar appropriations for future lapses. Requires a federal report within one year with counts of affected contractor employees and amounts paid.
Introduced October 1, 2025 by Tina Smith · Last progress October 1, 2025