Sponsors (36)
The bill protects contractors, contractor employees, and service continuity by guaranteeing reimbursements and adjustments for costs during funding lapses, but it creates open‑ended taxpayer liabilities, may blunt incentives to avoid future lapses, and adds administrative burdens unless tighter limits or oversight are added.
Government contractors and their employees will get contract price adjustments and reimbursements (including restored paid leave) for costs and lost wages from the FY2026 funding lapse, reducing unpaid expenses and restoring employee pay up to the statutory cap.
Federal agencies can continue to honor contract price adjustments during funding lapses, helping preserve ongoing services and program continuity so that government-delivered services and contractor-supported operations are less likely to be disrupted.
Agencies are required to act 'as soon as practicable' with processes to make adjustments and the Office of Federal Procurement Policy (OFPP) must report agency-by-agency numeric data to congressional oversight committees within one year, increasing transparency about reimbursements and adjustments.
Taxpayers will face open-ended additional federal costs because the bill authorizes 'such sums as may be necessary' to cover contract adjustments and reimbursements, increasing FY2026 outlays without a specific cap.
Agencies and Congress may face weaker incentives to prevent future funding lapses because automatic coverage of contract adjustments reduces the fiscal pressure to resolve appropriations gaps quickly.
Smaller contractors and some firms may face administrative burdens and cash‑flow stress while they assemble evidence and await agency approval and reimbursement, increasing business risk for contractors that front costs.
Based on analysis of 4 sections of legislative text.
Introduced October 1, 2025 by Tina Smith · Last progress October 1, 2025
Provides federal funding and requires federal agencies that experienced a lapse in appropriations (beginning around Oct 1, 2025, and any subsequent FY2026 lapses) to adjust contract prices so government contractors are reimbursed for reasonable costs they actually incurred to continue paying or restore paid leave for contractor employees affected by the lapse. Reimbursements are limited by a weekly cap per employee, require documentation, and must be implemented as soon as practicable; agencies will report aggregated data to congressional oversight committees. The Act also authorizes appropriations to cover those contract price adjustments.