U.S. Debt Ceiling Crisis Already Cutting Pay to Government Vendors

Government Contracts attorneys Eric Crusius and Robert Tompkins were interviewed by Bloomberg Government about how the approaching debt limit is affecting federal contractors. Though there is still time for Congress to reach a deal before the government runs out of funds to pay its obligations, the situation presents immediate concerns for contractors. Mr. Crusius explained that left unresolved, the issues could push away companies that would otherwise be interested in doing business with the government; he added that other initiatives, such as the expanded use of procurement, could be put on hold.

"You could see companies, especially companies offering innovative solutions, walking away," he said. "...All these efforts will take a step back."

Mr. Tompkins commented that should a default occur, funding Social Security and Medicare will be a much higher priority than paying contractors, which could leave companies unable to pay lenders despite completing work.

"When you think of contractors in that context, the violin strings aren't playing quite as loudly," he said.

READ: U.S. Debt Ceiling Crisis Already Cutting Pay to Government Vendors