DON’T LOOK NOW, BUT FY’23 APPROPS COULD BE AS LATE AS FY’22

While both government contractors and their federal customers had hoped that a final appropriations measure would be passed by Congress in the 2022 calendar year, that prospect now seems increasingly unlikely.  If polls predicting Republican control of one or both houses of Congress are correct, it is likely that substantial pressure will be brought in the post-election lame-duck session to postpone action on FY’23 spending bills until the new Congress convenes in January.  That means that the fiscal year may end up being essentially cut in half, again, in terms of appropriations money being available to start new projects.  President Biden didn’t sign the omnibus FY’22 appropriations bill until March 10th.  As a result, most individual offices didn’t have their final spending numbers until sometime in mid-April.  It is not unreasonable to project a similar scenario for FY’23.  While the new Congress will meet in early January, there will not be much legislative action for much of that month.  New members, too, will want to weigh in with their spending proposals, including the very real possibility of reductions in some areas.  That means that a final measure may not pass until the end of February, or perhaps after.  None of this is good news for contractors, their customers, or anyone who supports good federal management.  Delays and short business cycles tend to perpetuate existing projects and the use of outdated technology.  They also drive-up overall costs as more and more actions have to be broken up into increments.  The other shoe that may also drop is a year-long CR for all agencies except DOD and perhaps DHS.  Contractors should watch post-election Congressional action closely and plan to reboot their FY’22 business approach.