US Debt Ceiling Crisis Already Cutting Pay to Government Vendors

The debt ceiling crisis is presenting immediate concerns for federal contractors, even before the government reaches the X-date of running out of funds to pay its obligations.

Those issues, if left unresolved, will snowball into major problems for the Pentagon’s attempts to keep up with China—a major research goal—and the country’s broader tech industrial base.

“You could see companies, especially companies offering innovative solutions, walking away,” Eric S. Crusius, a Holland & Knight partner, said in an interview.

Congress has pushed for expanded use of procurement that allows agencies to buy certain goods and services more quickly than would otherwise ...