The federal fiscal year begins October 1, but full-year appropriations are not always enacted by then. When they are not, Congress often passes a continuing resolution, or CR, to keep the government funded on a temporary basis. Continuing resolutions have become a familiar part of the federal calendar, and they can affect when and how contracts move forward.
What a continuing resolution does
A continuing resolution is a law that provides temporary funding, usually tied to the prior year’s funding levels and conditions, for a set period. It allows agencies to keep operating while Congress works on full-year appropriations. A CR can last weeks or months, and sometimes several CRs are passed in a row. In some years, a CR has funded parts of the government for the entire fiscal year.
Common limitations under a CR
The specific terms of each CR vary, but they commonly include restrictions such as:
- Funding available at a rate based on the prior year, rather than at new requested levels
- Limits on starting new programs or projects that were not funded in the prior year
- Limits on increasing production rates or making certain multiyear commitments
Because funds may be released in portions over the CR period, agencies often take a cautious approach. They may fund only the most essential work, issue shorter contract periods, or delay new awards until full-year funding is in place.
How CRs can affect contractors
For contractors, the effects can include delayed solicitations, delayed awards, incremental funding of existing contracts, and short extensions of current contracts rather than new competitions. A program you have been tracking might slip by a quarter or more. Work that is new, rather than a continuation of existing efforts, is most likely to be affected.
A CR is different from a lapse in appropriations. If neither a CR nor full-year appropriations are in place, a funding gap can occur, which may lead to a shutdown of affected operations. Contractors should follow guidance from their contracting officers in that situation.
How to plan around uncertainty
- Diversify your pipeline. Track opportunities across multiple agencies and funding types so a delay in one area does not stall your whole year.
- Distinguish new starts from continuing work. Recompetes and ongoing requirements are often less affected than brand-new programs.
- Manage cash carefully. If you hold incrementally funded contracts, watch funding levels closely and communicate with your contracting officer before funds run out.
- Keep proposals ready. When full-year funding finally arrives, agencies may move quickly. Prepared firms can respond faster.
Where to follow the status
Appropriations status changes, so rely on official sources. Congress.gov tracks appropriations bills, and agency budget offices and contracting officers can tell you how a CR affects a particular program. Avoid making major business decisions based on rumors or speculation.
Continuing resolutions are frustrating, but they are also predictable in their own way. Firms that build them into their planning, rather than treating them as surprises, are better positioned to weather the delays.