The (Not So) New Normal: Government Contractors Should Always Plan for a Continuing Resolution

By Elizabeth Sullivan

In all but three of the last 46 fiscal years, Congress has enacted a continuing resolution (CR). Every year the same drama unfolds and the government contracting community gets understandably frustrated. Why? When there is a CR, contracts and grants suffer delays – a disaster for all involved. However, this timetable has become the norm – regular order is a thing of the past – and contractors should be prepared for it at the start of every new fiscal year.

A quick refresher on this process. There are two types of bills we will keep talking about: regular appropriation bills and CRs. Continuing resolutions continue the same level of funding from the previous fiscal year into the next fiscal year. If 12 appropriations bills are not signed into law or a CR is not passed before the new fiscal year begins on October 1, then comes a government shutdown. There was no appetite from Democrats or Republicans for a government shutdown this year – with the midterm elections coming in November, delaying the CR would have been a poor political strategy.

 

Generally speaking, the Congressional timetable for a CR is pretty much the same. The Congress passes a CR from the beginning of the new fiscal year until around the holidays, where the Members of Congress compromise before the clock strikes “Christmas.” This year, the President signed a CR into law to fund the government until December 16. If you are looking for more details on the appropriations process, they can be found here. After December 16, there will likely be another CR for a week to give appropriators the chance to iron out any differences and prepare a massive funding bill. In the end, after expressing frustration with the process, everyone goes home for the holidays. 

 

Why should government contractors care about this process? As previously mentioned, a CR generally means no new starts and usage of bridge contracts. Bridge contracts are either an extension to an existing contract beyond the period of performance or a new short-term contract awarded on a sole-source basis to avoid a lapse in service caused by a delay in awarding a subsequent contract. The federal workforce is subject to seemingly endless stop-and-start contract cycles, which creates inefficiency and disruption for the entire supply chain. This “not-so-new normal” disproportionately impacts smaller companies because it requires a reserve of capital and other resources necessary to keep the trains running. 

 

So, new normal? Not so much.