Tomeka B. Scales, Ph.D.
Director, Media Engagement & Communications
media@pscouncil.org

PSC Urges Congress to Enact FY26 Full-Year Continuing Appropriations and Avert Shutdown  

Media Roundtable Scheduled for Monday, Sept. 29 at 11 a.m. ET with PSC Leadership 

Arlington, Va. (September 26, 2025) -- In a Sept. 26 letter to Congressional leadership, the Professional Services Council (PSC) strongly urged Congress to pass full-year continuing appropriations for Fiscal Year 2026 (FY26) as soon as possible. PSC, which represents more than 400 federal contracting companies that provide critical services to federal agencies, stressed a shutdown would disrupt federal agency operation efficiencies; destabilize the contracting workforce and inflict lasting harm to the U.S. business base; and weaken the broader economy. 

“Federal agencies won’t be able to use the capabilities of contracting partners to sustain critical operations if there is a shutdown,” said PSC CEO James Carroll. “The potential national security consequences of a shutdown would cause unnecessary risk to U.S. citizens both at home and abroad.”  

Federal agencies increasingly depend on private-sector partners to carry out core elements of their work, from maintaining secure IT systems to delivering emergency preparedness solutions. When appropriations lapse, these partnerships are jeopardized. Time-sensitive projects are halted, procurement timelines are thrown into disarray, and long-term planning becomes nearly impossible. 

The consequences are particularly acute in sectors tied to national defense, cybersecurity, and emergency response, where continuity is not optional. Shutdowns disrupt work on classified systems and critical logistics, leaving vulnerabilities where none can be afforded. 

The impact on the government contracting industry—comprised of over a million U.S. employees nationwide—is severe. Unlike federal workers, contractor employees often do not receive back pay, even though many are prevented from working through no fault of their own. Small and mid-sized businesses, which form the backbone of federal contracting, face outsized risks and financial strain during these funding gaps. 

Beyond individual livelihoods, shutdowns erode workforce stability, morale, and the retention of high-demand skills—ultimately undermining the federal government’s ability to innovate and respond to future challenges. 

The broader economic implications are equally concerning. The 35-day partial government shutdown in 2018–2019 resulted in an estimated $11 billion in lost economic activity, with $3 billion permanently lost from GDP, according to the Congressional Budget Office. Recovery from each shutdown imposes additional administrative costs and delays, compounding the inefficiencies. 

“The real economic impact is likely much higher due to unmeasured losses in productivity, investments, and innovation,” said PSC President Stephanie Sanok Kostro. “Federal contractors — many of whom are small and mid-sized businesses — may not survive prolonged disruptions, weakening the government’s supply chain and innovation base.” 

Every day lost to shutdown is a day of taxpayer waste and mission delay. PSC urges Congress to fulfill its fundamental responsibility by passing appropriations in a timely manner and avert a government shutdown.  

On Monday, Sept. 29, 2025, at 11 a.m. ET, PSC will host a media webinar with PSC leadership including PSC CEO Jim Carroll, PSC President Stephanie Kostro, and PSC VP for Tech Policy and Government Affairs Tim Brennan. Questions to be answered include: What have we learned from past shutdowns? What current information is available? What are the implications for contractors in either scenario: a shutdown or a CR? 

Reporters can RSVP for this roundtable at media@pscouncil.org.  

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About PSC
The Professional Services Council (PSC) is the leading trade association and voice of the government contracting industry, representing more than 400 member companies—ranging in size from start-ups to multinational organizations—that support federal agencies through mission-focused services and solutions. Learn more at: www.pscouncil.org.