Federal contractor successor liability for pension withdrawal liability?

My client, a federal contractor, received a demand letter for pension withdrawal liability when their 7-year federal contract expired. The entity that won the new contract continued employing the exact same people doing the exact same job, making the exact same pension contributions.

If this were a sales transaction, the successor liability question would be clear, but this wasn't a sale. This was a contact ending and being picked up by the next employing entity. I would argue there hasn't been a withdrawal at all since these same employees continue to participate in the pension plan, just under a new employer's EIN. 

Is my client seriously on the hook for this charge that will probably bankrupt them?

That an employer’s obligation to contribute to a multiemployer pension plan ends in circumstances not of the employer’s choosing is not by itself an excuse from withdrawal liability.

Your client needs to lawyer-up, yesterday.

Is it for partial withdrawal liability or a complete withdrawal?  Employer can absolutely negotiate a lower amount and they will postpone enforcement pending review (although I recall the liability continues to accrue interest during the review).  They will request all financial records in determination of what the employer can afford....it is not easy to reduce the amount owed, but it can happen.  Let the negotiations begin.