As a result of this short term funding mechanism, contractors face a number of potential pitfalls: contract options are at risk, the next round of incremental funding is unlikely to arrive, and new contract awards and program approvals will be scarce.
These pitfalls, however, can be mitigated—and even exploited—by diligent contractors.
Continuing resolutions (CRs) are appropriation acts that provide budget authority for federal agencies to continue operations when Congress and the President have not passed regular appropriations acts by the beginning of the fiscal year. Typically, CRs allocate funding for a short duration in proportionate amounts from the time period of the preceding year, with the additional limitation that the rate of expenditure cannot exceed the previous year’s rate. This means agencies are not only limited to the total funds from the prior year, but so too by the rate of spending from the prior year. These limitations pose some obvious problems for contractors: options are at risk and incrementally funded contracts may face funding gaps.
Keep reading this article at: https://www.insidegovernmentcontracts.com/2016/12/deja-vu-continuing-resolution-raises-potential-pitfalls-contractors/