A Christmas Gift from Congress: Appropriations Bills Previous item 5 Trends Shaping the... Next item Q1 Federal Outlook - Work...

While it is still too early to say for certain, there is a good chance Congress may actually pass most of the stalled FY’15 appropriations measures before Christmas. This would give almost all agencies (except for perhaps the Department of Homeland Security) certain budgets for the remainder of the fiscal year. This is good news for contractors as federal customers will be able to implement planned new projects that they have been unable to start as the Continuing Resolution (CR) that currently funds the government through December 11th doesn’t allow for such actions.

Contractors interested in knowing whether their federal customers will have appropriated money, vs. implementing another CR should circle the date December 12th on their calendar. Word is that Congress would like to go home on that day having passed 11 of the 12 appropriations measures in a single, omnibus package the day before. There is no serious talk of a shutdown, as there was last year, so the real question is whether the lame duck Congress will finish with most of its appropriations work or kick the ball to the next Congress by passing another CR.

Should current reports about actual appropriations prove to be true, your federal customer will likely know its budget for the remainder of the year by mid-January. It takes some time after Congressional action for the Office of Management and Budget to work with each agency to dedicate funds to specific line items. If, however, your customer tells you in March that they don’t have their money yet, it may be more of a sign that they have it, but won’t be spending it with you.

Homeland Security may be the sole exception as Congressional Republicans want to retain some appropriations leverage over the President in the event he issues a widely-expected Executive Order on immigration. If issued, Republicans would then likely move to withhold all funding related to the implementation of the Executive Order in the DHS bill. A considerable debate would then be had in Congress before DHS would receive any appropriation.

Even under this scenario, however, DHS would not shut down, but rather stay funded under a special CR until sometime in 2015.

While contractors, and their federal customers, may not be thrilled at the prospect that the FY’15 fiscal year will be cut from 12 months to 9, such an event would be better than some recent years and is better than many federal budget forecasters had predicted before the November elections.  Some had openly discussed not only the passage of a CR into February (still a distinct possibility, but let’s be optimistic), but also the possibility that the new Congress might simply implement a CR for the entire government for the remainder of the year.

This latter option has happened in the recent past, handcuffing agencies in planning and doing anything new and frustrating industry.

Contractors with an interest in having an actual appropriation measure passed should let their elected officials know. Be specific. Site the impact on your business of unsteady funding. While you’re at it, throw in some comments on why a second round of sequestration in FY’16 would be bad for your business. Right now, it looks like that’s where we’re headed.

The news from Washington can’t ever be all good.