Funding Contracts Under a Continuing Resolution: What You Need to Know
When Congress fails to pass a budget before the end of the fiscal year, the government may operate under a continuing resolution (CR) to keep the lights on. CRs are short-term funding measures that allow the federal government to maintain its basic operations while lawmakers work on passing an annual appropriations bill.
However, CRs can create uncertainty for government contractors who rely on federal funding for their work. Here`s what you need to know about funding contracts under a CR.
1. CRs typically maintain funding at the prior year`s level.
Under a CR, government agencies typically maintain their funding at the prior year`s level, with some exceptions. This means that government contractors may continue to receive payments from existing contracts at the same rate, unless the government agency decides to make changes.
2. New contracts may be delayed.
Government agencies may be hesitant to issue new contracts under a CR, as they may not have the authority to make long-term commitments until Congress passes a budget. This could result in delays in the contracting process and potentially affect a contractor`s revenue.
3. Modifications to existing contracts may be limited.
Under a CR, government agencies generally cannot make significant changes to existing contracts, such as increasing funding or scope, without approval from Congress. Contractors should be aware of the restrictions on modifications to their existing contracts and plan accordingly.
4. Compliance with relevant regulations is still required.
Even under a CR, government contractors must still comply with relevant regulations, such as the Federal Acquisition Regulation (FAR) and agency-specific regulations. Failure to comply with these regulations could result in negative consequences, such as suspension or debarment from future government contracts.
5. The CR may be extended or replaced.
CRs are typically short-term measures, lasting anywhere from a few days to several months. Contractors should be prepared for the possibility that a CR may be extended or replaced with a new appropriations bill.
In summary, government contractors should be prepared for uncertainty and potential delays when working under a CR. Understanding the restrictions and requirements of a CR can help contractors navigate the contracting process during this challenging time.