A Continuing Resolution Is on the Horizon

At this point, anyone keenly watching the budget process every year can tell you the likelihood of a continuing resolution (CR) being passed as opposed to a new budget by Oct 1st is all but guaranteed. CRs act as a temporary stopgap designed to avoid a government shutdown. However, it also locks funding to the previous fiscal year’s level and prevents new projects from getting started. Projects then remain under operations and maintenance until a new budget, with new requirements, is passed.

We will explore where the opportunities are still for vendors based on agencies that continue to spend in those early months of a fiscal year. There will continue to be funding, but at what level, and how does that affect contractors looking for more opportunities in their market? If your company is on a contract and working, you’re good to go at the same funding levels. If, however, you’re looking for new opportunities, it’s a bit trickier.

Trickier doesn’t mean impossible. The positive side of ramifications of a continuing resolution often include the following:

1. Agencies may justify investment in their solution if they can frame it as operations and maintenance (O&M).
2. Some funds are multi-year and are not limited by the turning of the clock into a new year.
3. There are procedures that allow for in-year shifting, or what is known as “reprogramming,” around of dollars which can provide opportunity.
4. If your solution helps enable what is deemed an essential mission function for that customer, then that opportunity will be less affected by a CR.

Our analysis of past government procurement data suggests continuing resolutions haven’t prevented mission-critical pursuits, especially opportunities tied to any security need – be it cybersecurity or national security and all the related products and services in those sectors - from continued development. Therefore, aligning your efforts to those needs proves that even in a time of “stalled” funding, not everyone is short on opportunities.

Reprogramming

It's also worth examining further that while a CR prevents new projects from beginning, there is wiggle room when it comes to the idea of “reprogramming” dollars. Agencies often move funds around within accounts as needs shift, and as a matter of budgetary need. Doing so without specific statutory authority from Congress is illegal but there is some level of flexibility. Prohibitions against reprogramming funds within an appropriations account, however, vary among agencies, as there are no government-wide reprogramming rules.

Reprogramming happens often, so staying abreast of your customer’s flexibility and past tendencies with reprogramming dollars, in the early months of the fiscal year, proves to be a solid strategy even during a CR. This is especially relevant if your solution addresses a critical need.

Continued Opportunity

The passing of a continued resolution can bring with it an initial sense of discouragement for the lack of a new budget and inability for agencies to start new projects. There are still opportunities when a new budget is not passed, especially within certain agencies. It’s not an all-or-nothing game with the federal government; instead, knowing where to look and how to approach the money that is reprogrammed, moved around, or deemed essential regardless of when a budget may be passed, is a good bet.

To get more TD SYNNEX Public Sector Market Insight content, please visit our Market Intelligence microsite.
 

About the Author:
Susanna Patten is a senior manager on the TD SYNNEX Public Sector Market Insights team covering tech trends across the Public Sector. Susanna has over 13 years of experience in public sector IT procurement. Her responsibilities at TD SYNNEX Public Sector include driving market intelligence asset production, ensuring the quality and relevance of deliverables from the Market Insights team, and aligning these insights with sales opportunities.