Sponsors (36)
Introduced October 1, 2025 by Tina Smith · Last progress October 1, 2025
The bill protects contractors, contractor employees, and continuity of government services during FY2026 funding lapses by enabling contract-price adjustments and reimbursements and requiring quicker action and reporting — at the expense of increased, less predictable federal outlays and reduced congressional control, with some implementation and equity risks for small firms and higher-paid workers.
Government contractors and contracting agencies can adjust contract prices and access funding tied through Dec. 31, 2026 to cover costs from the FY2026 appropriations lapse, reducing unpaid liabilities for contractors and helping firms avoid bankruptcy or severe losses.
Agencies receive a dedicated authority and explicit direction to implement contract adjustments promptly, enabling faster resolution of contractor claims and reducing disruption to government operations and services.
Contractor employees who lost work during a shutdown can be reimbursed for lost wages (up to $1,442 per week) and contractors can recover costs to restore paid leave used during the lapse, reducing immediate financial harm to workers and small contractor firms.
Taxpayers may face higher and less predictable federal outlays because the bill funds contract adjustments and reimbursements for FY2026 without specified offsets or a strict dollar cap.
The bill’s broad, open-ended authority for contract-price adjustments (with no fixed overall cap or clear expiration) reduces fiscal predictability and can weaken congressional control over spending timing and amounts during lapses.
Reimbursements require agencies to verify that costs were “actually incurred” and provide documentation; that review process and broad agency discretion over what documentation is “appropriate” can delay payments and strain small contractors’ cash flow.
Based on analysis of 4 sections of legislative text.
Requires agencies to adjust contract prices to reimburse contractors for paying employees and restoring paid leave during funding lapses, with documentation and a $1,442 weekly cap per employee.
Requires federal agencies that experienced or experience a lapse in appropriations during FY2026 to adjust contract prices and reimburse contractors for reasonable costs of paying employees (including restoring paid leave) during the lapse period. Reimbursements are limited to actual costs, documented to agency standards, and capped per employee at the lesser of actual weekly pay or $1,442 (pro‑rated for part‑time); agencies receive funding to cover those reimbursements and must report specified counts to Congress and the public within one year.