Continuing Resolution Authority

A Continuing Resolution is a temporary appropriations measure that Congress enacts to keep the federal government operating when regular annual appropriations bills have not been passed by October 1, providing interim funding authority at prior-year levels or rates until full-year appropriations are enacted.

What is a Continuing Resolution (CR)?

A Continuing Resolution (CR) is a joint resolution enacted by Congress and signed by the President that provides temporary appropriations for federal agencies when the regular appropriations process has not been completed by the start of the fiscal year (October 1). The CR has been the default mechanism for funding the government in virtually every recent fiscal year, as Congress has rarely completed all twelve regular appropriations bills on time.

Key characteristics of a CR:

• Rate, not amount: Most CRs fund agencies at the prior year's enacted rate (or the lower of the current request and the prior year rate), prorated for the duration of the CR period. A one-month CR typically provides approximately 1/12 of the prior year's appropriation.
• No new starts: CRs typically prohibit agencies from initiating new programs or projects not funded in the prior year. New contract awards for programs not previously funded may be restricted or prohibited.
• Temporary: CRs are enacted for specific periods (days, weeks, months) and must be renewed until full-year appropriations are enacted.
• Planning uncertainty: Agencies operating under a CR cannot obligate funds at annual rates; they can only spend at the CR rate. Large solicitations and contract awards that require more funding than available under the CR rate may need to be deferred.

Impact on contracting:

• Contracts that were in progress at the end of the prior fiscal year generally continue; the CR covers ongoing obligations.
• New contract awards for programs funded at reduced CR rates may need to be structured with initial partial funding and the expectation of additional funding when full-year appropriations are enacted.
• Award of new IDIQs or large new contracts is restricted if the required funding exceeds CR-available levels.

Why Continuing Resolutions matter for government contractors

CRs create significant uncertainty for contractors. Programs that expected to receive new contract awards in October may be deferred to mid-year when full-year appropriations pass. Program offices operating under a CR may not be able to issue task orders against existing IDIQs at full-year rates. BD teams should model scenarios in which full-year awards are delayed by 3-6 months due to CR operations.

Example

A federal IT company had expected a $45 million task order award in October under an existing IDIQ for a new cloud migration project. Congress has not enacted the annual appropriations bill, and the agency is operating under a CR that funds the IT account at approximately 85 percent of the prior year rate with a "no new starts" restriction. The cloud migration was not in the prior year's budget. The contracting officer advises the contractor that the award must be deferred until either a full-year appropriation is enacted or the CR language is modified to permit new starts. The contractor plans for an award delay of 4-6 months and adjusts staffing plans accordingly.

Frequently Asked Questions

What is a government shutdown and how does it differ from a CR?

A government shutdown occurs when no CR or appropriations bill is enacted - the government literally runs out of legal authority to operate and pay employees. Agencies furlough non-essential employees, and all but essential government functions cease. A CR prevents a shutdown by providing temporary appropriations. The difference is legal authority: under a CR, the government has appropriated funds to operate; under a shutdown, it has none.

Can agencies award contracts during a CR?

Yes, for requirements within the CR's rate authority and that do not violate "no new starts" restrictions. Ongoing programs can continue. New programs not previously funded face restrictions. Contracting officers must evaluate each award against the available CR funding rate and any specific CR restrictions. When in doubt, agencies seek guidance from their appropriations counsel.

How do CRs affect multi-year contracts?

Multi-year contracts with existing obligations are not directly affected by a CR - the prior-year obligations remain valid. What is affected is the ability to add new options, exercise option years requiring new obligations, or issue new task orders beyond what the CR rate permits. Contractors monitoring program funding should track whether option exercise or task order issuance is within the CR rate.

What is an omnibus continuing resolution?

An omnibus spending bill combines multiple regular appropriations acts into a single omnibus bill that is often enacted near the end of the calendar year (December or January). An omnibus CR combines the temporary funding mechanism of a CR with the broader consolidation of an omnibus bill. Omnibus appropriations typically provide full-year funding once enacted, ending the uncertainty of operating under a CR.