CONGRESS MAY CONSIDER LETTING DOD KEEP SOME FUNDS PAST END OF YEAR

Over 40% of the Department of Defense’s budget is Operations and Maintenance (O&M) money.  Right now, any unobligated funds in that account, used to buy most commercial services and products, expires at the end of the year.  Congressman Mac Thornberry (R-GA), though, is proposing a change that would allow DOD to keep up to 50% of unobligated O&M money into the following fiscal year.  This could mean a big change for contractors used to seeing an end of year spending blitz.  It is true, but not very well known, that the departments of Homeland Security, Housing and Urban Development, Transportation, and Treasury already have such authority. How often it is used, though, is uncertain as many offices in these agencies continue to commit considerable dollars at the end of the fiscal year. The idea behind such flexibility is obvious:  to give agencies more time to make better acquisition decisions, rather than rush a lot of dollars out the door in a compressed time period.  That is a particular concern this year as agencies have delayed spending in many areas because of COVID-19.  There is considerable money left to renew existing projects and perhaps even initiate some new ones.  Thornberry will try to attach his amendment to the FY’21 DOD appropriations bill this summer.  Contractors may want to watch this closely as its passage could change future business development practices