January 2026: Partial Government Shutdown Imminent—Key Considerations for Federal Contractors

Last fall, the longest government shutdown in U.S. history—at 43 days—had lasting and widespread negative impacts across the country. The shutdown ended when Congress eventually agreed on an appropriations bill, but that bill funded the government only through January 30, 2026, with full-year appropriations only for Agriculture, the Legislative Branch, Military Construction, and Veterans Affairs. Since then, full-year appropriations were passed and signed into law for Commerce, Justice, Science, Energy and Water Development, and Interior and Environment. However, six of the twelve Fiscal Year (FY) 2026 appropriations bills, which provide funding for the vast majority of federal agencies, remain in limbo with funding set to run out for the covered agencies as of January 31. These bills—covering DHS, DOD, Labor, HHS, Education, Transportation, HUD, Financial Services and General Government, National Security, and the State Department—were passed by the House but currently appear unlikely to pass in the Senate due to partisan divisions over the Homeland Security bill following the second deadly shooting of an American citizen by U.S. Immigration and Customs Enforcement agents.  More