The current Federal fiscal year started on October 1, 2021. Four continuing resolutions (CR) and five and a half months into the fiscal year — on March 15, 2022 — the President finally signed into law the full-year appropriations for all federal agencies for the current fiscal year, running through September 30, 2022. This $1.5 trillion, 2,741-page appropriations law provides a 6.7 percent increase over the President’s budget request for non-defense agencies and a 5.6 percent increase for defense activities.
A Few High Points
Under the bill, agencies have been significantly funded for a wide range of information technology and cybersecurity activities. The Transportation Department has received substantial funding for the recently enacted bipartisan infrastructure law. The Department of Homeland Security (DHS) received increased funding for programs carried out by Immigration and Customs Enforcement (ICE). The Department of Health and Human Services (HHS) received funding for the new Advanced Research Projects Agency for Health (ARPA-H). And DoD saw increases in all of its Operations & Maintenance accounts as well as for its procurement accounts. But certainly not all programs and activities have survived or seen funding increases.
When does the Funding Flow?
However, even as the ink dries on the funding bill, it will take some time for new money to flow to the federal agencies and show up in new solicitations. As part of the normal apportionment process, the Office of Management and Budget (OMB) must first allocate the funding in the bill to the various agencies and programs. And compare it against agency spending to date under the previous CRs and with any restrictions on funding in the new bill. Once the allocation is made to the agencies, each agency goes through a similar sub-allocation review and analysis before program offices receive a green light to commit federal funds.
Programs Awaiting Funding
For programs or activities that have been waiting for a confirmation of their available funding, they should have already been taking actions to get the internal approvals for the release of new solicitations. Similarly, for agency contracting actions that have already been underway, contractors should be sure they have access to the necessary internal or external resources, including proposal support resources, and approved internal B&P funding, to be ready to pursue their chosen opportunities as they become available. Because, where possible, agencies will want to make their initial awards before the end of the current fiscal year.
Even new agency proposal activity doesn’t have to wait until all of the internal agency funding steps have been taken. Requests for information (RFIs) don’t require federal funding to solicit or review. Nor do releases of draft RFPs. And these actions can be very valuable to both agencies and interested contractors and help speed up the release of final RFPs, proposal submissions, and award decisions. Agencies can also hold in-person or virtual industry days to inform the public of their mission goals, objectives, and timelines. There is just over six months left in this fiscal year to start the solicitation process and make initial awards.
Appropriations for FY 2023
Then, the new Fiscal Year 2023 starts on October 1, 2022. The President’s budget will be submitted to Congress on March 28, 2022, about six weeks behind the statutory requirement but very fast after the current year appropriations bill enactment, starting anew the next congressional review and appropriations action cycle. (It has been a rare event over the last decade that Congress enacted full-year appropriations for some or all of the federal agencies without the need for CRs.) Since we are going into a critical mid-term congressional election cycle, past performance makes it doubtful that Congress and the White House will be able to reach an agreement on the myriad specifics required to move any, let alone all, of the appropriations bills to the finish line before the October first start of the new fiscal year.
So, contractors should work now with their agency customers to help them kick-off as much of the new work as possible during the current fiscal year to avoid an indeterminate pause on program work (and even proposal activity) until well into the next fiscal (or even calendar) year, should a CR be necessary to start the new fiscal year.
The enactment of the full-year appropriations is a welcome development – and beats the alternatives of a shutdown or a full-year CR. But agencies have a lot of work to do to take advantage of the funding Congress has made available. Contractors also have to be ready to respond rapidly to the flood of expected opportunities to come.
About the Author: *Alan Chvotkin is a partner in a leading federal contracts law firm Nichols Liu LLP. He is the former executive vice president and counsel for the Professional Services Council (PSC) and a recognized subject-matter expert (SME) in federal procurement.