How Defense Contractors can Thrive During Continuing Resolutions

Continuing Resolutions are a stopgap to keep the government from a shutdown when Congress cannot agree on government spending for the next fiscal year. When first enacted in 1876, this was primarily a non-controversial move. Still, as the political landscape has become increasingly polarized in recent years, continuing resolutions are leveraged as proof of stubbornness by the opposing party. The Government Accountability Office has found that between Fiscal Year 2010 and FY 2022, there have been 47 continuing resolutions, with the current CR set to expire on December 16, 2022, as of this writing.

While this game has no real consequences for legislators, the ramifications of budget uncertainty can stress millions of government employees and contractors. Amidst all this uncertainty, defense contractors can learn from the Department of Defense’s actions in the indecision to win bids.

How is the DoD Different?

The issue for most of the government when Continuing Resolutions are passed is that when the new fiscal year hits every October 1, budget uncertainty can cause delays in construction projects, forcing hiring freezes and ultimately leading to a government shutdown should a final appropriation or other continuing resolution not be agreed upon by the deadline. However, the Department of Defense is tasked with many “no-fail” missions that cannot be delayed due to budgetary restrictions, so the DoD plans every fiscal year as if there will be a CR.

While purchases, hiring, and military exercises are directly impacted during CRs, they do not typically come to a complete halt. The CR provides temporary funding for the DoD, which then conservatively spends until a final appropriation is made.

Since the DoD has worked in these conditions for decades, they have found a rhythm in operating under them, with a baseline assumption of planning for this to happen. Some steps taken by the Defense Department include initiating service contracts after the end of the first quarter, planning many exercises later in the fiscal year, and postponing purchases of nonessential services.

What can defense contractors do?

Amidst all the chaos a Continuing Resolution inherently brings, defense contractors can still take steps to stay prepared.

The first thing to do is to presuppose a continuing resolution is coming. As history has shown, the odds of the fiscal year beginning with a passed appropriations bill are almost nonexistent. Defense contractors should, therefore, be prepared for a CR and ensure their business is set up to endure through a slower first quarter of the fiscal year.

Next, defense contractors should keep their finger on the pulse of the CRs. Ensure your business is prepared to scale up when the appropriations bill is inevitably passed.

Finally, defense contractors should stay prepared to put their work out for bid as soon as the time is right. By utilizing Odyssey’s platform, defense contractors can be assured that they will be ready once Congress passes the appropriations bill to find a servicer who needs their expertise.

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