The 2025 government shutdown is squeezing small government contractors, with federal contract opportunities drying up in key agencies. With entire agencies going dark, contracting offices shuttered, and invoices stuck in limbo, small businesses need to know what to do next. Find out where procurement is still flowing and how small businesses can protect revenue and reallocate resources fast.

In this episode, we break down the critical issues and actionable pivots for small and midsize businesses (SMBs):

• The Hardest-Hit Agencies: Agencies reliant on discretionary funding have slowed to a crawl. NASA, which furloughed approximately 83% of its workforce, has halted new R&D and high-tech contracts. NOAA/Commerce and EPA are in near-total freeze mode, with over 89% of staff furloughed, suspending almost all new contracts and grants. The Department of Education has also ceased awarding new grants or contracts.
• Who Is Still Buying: Procurement continues at agencies funded by mandatory or fee-based budgets. VA (97% working) and DHS (95% working) continue essential buys, meaning VA medical centers, FEMA, TSA, and border agencies are still actively procuring services and supplies. Additionally, the Department of Transportation (DOT) continues trust-funded work, such as highway and airport operations.
• The SLED Pivot Strategy: Learn how smart SMBs are shifting focus to State, Local, and Education (SLED) buyers who still have active procurements. Many state DOT maintenance divisions, public safety agencies, universities, and K–12 districts are continuing procurements using dedicated education or trust funds.
• Leveraging Cooperative Purchasing: We highlight using cooperative purchasing pools like Sourcewell, HGACBuy, and NASPO ValuePoint, which operate independently of the federal shutdown and currently list open bids for items such as virtual health products and public safety equipment.
• Protecting Cash Flow: If your federal pipeline has stalled, get tactical advice on documenting all costs and communication meticulously. Contractors are entitled to cost and time adjustments under FAR 52.242-15 (Stop-Work Order) and 52.242-14 (Suspension of Work), but claims must be asserted within 30 days of work resumption.
• New Opportunities: Explore active federal channels like USDA field offices that have reopened to deliver $3 billion in farm aid, and learn how finding subcontracting lanes with primes on funded IDIQs (like NASA SEWP V or DHS EAGLE) can provide immediate work.

Stay nimble, track developments daily, and ensure your 30-day playbook includes state and local targets, updated business development messaging, and aggressive follow-ups on payments and pipeline.