The appropriations for the balance of fiscal year 2018 almost certainly will include a healthy increase in spending and will be passed this year. This is a breath of fresh air after what has been a flat year for business developers at many contractor companies.

Why are we looking at such a salutary outcome, after the long and contentious budget battles prior years? Two reasons stand out:

1. The GOP is anxious to get the appropriations done to be able to focus on passing its tax reform legislation.
2. The fiscal conservatives now holding the balance of power in the House have decided to postpone a resolution of the deficit problem.

In the rest of this article I will focus on when the appropriations will be completed and how the totals will compare to 2017.

Alan Chvotkin, Executive Vice President of the Professional Services Council (PSC), is close to the appropriations process and shares this prediction: The FY 18 appropriations might be completed in November but will certainly be done by end of December. “There is too much pressure on congress and the White House to do something, and soon,” he said. In addition, House Speaker Paul Ryan has said that the appropriations will be done before the holiday recess, or he will call the members into special session “until the appropriations are finished.”

It is no surprise that the GOP and the Democrats have different views on what shape the appropriations should take. The Dems all along have insisted on parity — roughly the same proportion of spending on civilian and defense programs as in 2017. The GOP favors more defense spending and less civilian. The Dems will likely get some of what they want – more civilian and maybe even a lot of infrastructure spending.

Best industry opinion as to the net outcome to the appropriations arm wrestling is as follows:

1. As much as $40 – $50B more DoD spending – but final number more likely $30B – higher than in 2017
2. ALSO $10B more for civilian spending, plus some for infrastructure.

It is significant to note that the early passage of the final FY 18 appropriations may be even more important than the increase in the dollar value. This is because late passage of the appropriations, such as we had in 2017, discombobulates the procurement process. When the appropriations are late, there is not enough bandwidth for the Government to process all of the RFP business. And so the entire industry suffers because general delays in RFP releases and resulting proposal submissions become unavoidable.

A strong uptick in the federal appropriations – or at least an early one – will help ensure a Happy Holiday Season in contractor companies.