WHAT THE APPROPRIATIONS DEAL MEANS FOR CONTRACTORS

Congressional leaders appear to have finally reached a deal on top-line spending and other macro issues that will enable the passage of FY’23 appropriations by December 23rd.  A one week CR was required as the previous measure expired on December 16th to give Congress enough time to put a final measure in place.  That detail was taken care of last week, just hours before the deadline.  This is all good news for contractors and their customers.  If events unfold as expected all agencies will receive appropriations for the remainder of the 2023 fiscal year.  Each individual office may have its spending number on or about the first week of February. That means an end to the prohibition on starting new projects that require appropriated money. Final planning can take place and solicitations issued to fulfill critical needs.  Contractors should continue to stay in contact with current and potential customers to monitor progress on individual opportunities.  First, some may change from what current projections indicate.  Second, industry always has a chance to help shape a procurement up until any solicitation is issued.  It is also notable that Congress is definitely back in the business of issuing earmarks. Earmarks are essentially directed Congressional spending that must take place to acquire specific solutions, often with a constituent company in-line to get the work.  Bloomberg Government estimates that the final FY’23 omnibus appropriations measure will contain more than 7,500 earmarks totaling over $16 billion.  Contractors should take note of this and plan to approach their own elected officials in January or February about possible FY’24 earmarks.  Congress may never pass appropriations measures on time but getting them done by the end of the calendar year is “the new normal”.  Federal customer agencies plan for this eventuality and contractors should as well.