On September 26, Congress and the President avoided a government shutdown by providing temporary funding for government operations, including some supplemental funding for other purposes, through December 20. The enacted legislation, known as a Continuing Resolution (CR), keeps the government’s lights on in lieu of the standard 12 appropriation bills necessary to fund the government for fiscal year 2025.
Although CRs have proven the recent strategy of choice by policymakers to sidestep costly government shutdowns, there are inefficiencies and challenges inherent to the strategy that ripple across government agencies charged with delivering services to the nation. One such agency not immune to the uncertain operating environment of a CR is the U.S. Army Corps of Engineers (USACE).
We asked three Dawson colleagues who served as senior leaders at the highest levels of USACE to describe briefly how operating under a CR impacted their mission.
Gary Loew – Former Chief of the Civil Works Programs Integration Division overseeing the budgeting, appropriations and execution of the USACE $5+ billion annual civil works programs
Little impact on the workforce – Employees are, for the most part, funded by money already congressionally appropriated for on-going projects and those funds do not expire at the end of the fiscal year. So, work goes on.
Not business as usual – A CR does impact the work of the new fiscal year beginning October 1st. When a CR is passed, Office of Management and Budget guidance typically states that agencies may continue ongoing work at the past year's funding level minus 10%. That guidance assures that an agency receiving a smaller appropriation in the new fiscal year will not overspend. USACE adjusts its spending accordingly.
No new contracts – Typical OMB guidance states that USACE cannot award any new contracts during the CR period. Again, this makes sense as the new appropriations may include guidance that may have less or no funding for specific projects or programs. Thus, agencies continue working but less efficiently, especially for projects under construction (about 70-90% of Corps funding is spent through contracts.)
Delays on future contracts likely – If passage of a full appropriations bill drags into 2025, USACE may only have nine or fewer months in FY2025 to award contracts. This can be inefficient and add to the contract cost. Most construction projects are accomplished through multiple contracts scheduled for a set schedule. This schedule may be delayed while awaiting new appropriations.
Contract award logjam possible – USACE design, construction and contracting staff may have contract awards pile up due to lost time under the CR. While the physics of contract award are relatively fixed – USACE must announce it, advertise for a set period, evaluate bids, and finally make the award – the process can take two months for small contracts and four or five months on large contracts. So, while the CR may not impact the workforce, it can certainly impact project schedules.
Doug Lamont – Former Deputy Assistant Secretary of the Army for Project Planning and Review
Budget uncertainty for non-Federal project sponsors – A CR introduces uncertainty as to when sponsors need to commit their funds on cost-shared Civil Works projects and studies to align with Federal appropriations once they are available. Sponsors therefore may have to make uninformed decisions about their own investments and budget processes during the period of uncertainty.
Impacts beyond the current Fiscal Year possible – Regardless of the 2024 election outcome, if the CR continues into spring of 2025 the President’s FY2026 budget submission to Congress may not have the benefit of knowing FY2025 appropriations amounts. This creates additional uncertainty and inefficiency in the multi-year budget development process.
Lloyd Caldwell – Former USACE Director of Military Programs overseeing engineering, construction, environmental remediation and real estate for Defense activities
Military construction project delays likely – A CR typically includes a provision of “no new starts” for military construction projects. As a result, thousands of construction projects across the Department of Defense and other Federal Agencies with construction requirements, are relegated to a holding status.
Project delays reduce military readiness – Agency projects, from new barracks to family housing, maintenance facilities to runway improvements, all contribute to military readiness. Proponents of those projects will argue that delaying the start for new projects, and other programs, poses a national security risk to the Nation.
While the CR may be a useful political tool, resolving instead to enact full-year funding bills on time or to consider other reforms to the budget process reducing the impacts of a CR would ensure agencies like USACE can continue providing uninterrupted effective and efficient services to the nation.
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