CONGRESS PUNTS AGAIN ON APPROPRIATIONS, WHAT IT MEANS TO YOU

Congress passed another CR last week to give itself more time to (hopefully) pass FY’24 appropriations bills, even as we get closer to FY’25.  March 8th is the new deadline for “non-controversial” funding for the VA, HUD, FDA, and smaller agencies, while March 22nd is the new deadline for DOD, DHS, and about 80% of all discretionary spending.  This effectively means that no new projects requiring appropriated money will be able to be awarded until approximately May 1st, seven months into the fiscal year.  The substantial delay means that appropriations will be about as late as they have ever been without there being a year-long CR. While Allen Federal had predicted a short-term CR for the first trench of agency funding conventional wisdom had been that “short term” would be measured in days, not weeks.  All this equals frustration for federal contractors and their customers.  First, the severe delays have a true negative impact on national security, as well as on front-line priorities like cyber and AI development.  Second, Congressional inaction dampens hiring and seriously dents cash flow, especially for smaller contractors.  Lastly, the compressed timeframe in which acquisition officials will have to award new business will make the end of the fiscal year look truly like “Mr. Toad’s Wild Ride”.  Moving efficiently at high speed will be essential.  Contractors should prepare themselves now so that they are ready to meet the challenge of a tidal wave of opportunities coming out one right after the other.  We have previously recommended providing government customers with suggestions on fast and efficient ways to award business.  This is particularly true now.  There is absolutely no guarantee that that the latest CR extension will result in actual appropriations, either.  The issues that need to be resolved are, indeed, thorny and will be played out against the backdrop of looming Congressional elections.  While we all hope for final passage, this is one opera that will certainly not be over until the Congressional fat lady sings.