Sponsors (36)
Official title: Provide back pay to Federal contractors, and for other purposes.
Introduced October 1, 2025 by Tina Smith · Last progress October 1, 2025
The bill protects contractors, their workers, and program continuity during FY2026 funding lapses by authorizing reimbursements and price adjustments, but it does so with open-ended spending authority that raises taxpayer costs, reduces congressional budget control, and may create administrative delays for small contractors.
Government contractors and federal agencies can adjust contract prices and receive funding to cover costs from the FY2026 lapse, reducing unpaid liabilities and helping preserve ongoing government services.
Contractor employees who lost work during a shutdown (and their employers) can be reimbursed for lost wages (up to a weekly cap) and for restoring paid leave, reducing immediate financial hardship for workers and small contractor firms.
Affected contractors and workers will receive payments sooner because agencies must make contract adjustments “as soon as practicable,” speeding reimbursements and claim resolution.
All taxpayers may face higher and less predictable federal spending because the bill authorizes reimbursements and contract adjustments without a fixed dollar cap or clear offsets.
Congressional budgetary control is reduced because the bill creates broad, open-ended spending authority during lapses, limiting Congress's ability to time and cap appropriations-related outlays.
Small contractor firms and some contractors may face cash-flow strain and delays because reimbursements require documentation, agency review, and agency discretion over what proof is "appropriate," slowing payments.
Based on analysis of 4 sections of legislative text.
Requires agencies to reimburse contractors for documented employee pay and restored leave costs from funding lapses, capped at the lesser of actual weekly pay or $1,442.
Requires federal agencies affected by an appropriations lapse to adjust contract prices to reimburse contractors for reasonable costs of paying employees at their normal rate (including furlough periods or reduced hours) and restoring paid leave used because of the lapse. Reimbursements are limited to documented actual costs, capped at the lesser of actual weekly pay or $1,442 (pro‑rated for part‑time), and agencies are funded to make those adjustments for FY2026 lapses with funds available through specified dates.