Continuing Conundrum

October signals the changing of
the seasons, the beginning of a
new fiscal year for the federal
government and the return of
that odd governmental bird, the continuing resolution
(CR). Congress and the president use this temporary
measure when they can't agree on permanent appropriations
measures. If Congress doesn't approve the budget on time and no
CR is in place, most of the federal government will cease to
function.

That's only happened once for any protracted time in the past
two decades. In the last half century, however, hardly an October
has passed without at least one CR. During the past three budget
cycles, 25 CRs flew by, stalling new procurements in some agencies
for as much as a third of the fiscal year. Before the latest CR was
enacted on Sept. 30, 2004, Congress
approved the defense, military
construction, homeland security and
District of Columbia appropriations.
The rest were included in the CR.
Congress approved the omnibus
appropriations bill on Nov. 20, and
President Bush signed it into law on
Dec. 8.

"The CR is a fact of life," says
Mitchell Morand, area director for
government contracting in eight southern
states for the U.S. Small Business
Administration (SBA). In that position, he
oversees procurement and advises small
business contractors on doing business
with the government.

For veterans like Morand, dealing with CRs takes more than
a this-too-shall-pass attitude. As a rule, CRs freeze agency
spending at prior-year levels according to a prorated share: If the
CR lasts 30 days, an agency has one-twelfth of the funding it had
the previous year. Dealing with CRs from a procurement
perspective involves focusing on the difference between
mission-critical and nice-to-have products and services.

James Seligman, CIO for the Centers for Disease Control and
Prevention in Atlanta, says the CDC learned through experience
to carefully structure contracts for IT spending to avoid
ensnarement in the CR trap. One method, Seligman explains, is
to structure ongoing IT contracts and software license deals to
begin and end midyear instead of coinciding with a new fiscal
year, so renewal dates fall outside usual CR terms. When a CR
extends prior-year spending levels into the next fiscal year, the
agency's routine expenses from prior-year contracts are already
covered, and it has preset priorities for the purchases it has to
make in the new year, he explains.

"We usually have headroom to spend what's necessary in
October, November and December," Seligman says. Congress
usually puts CRs in place while its members are in their home
districts for year-end holiday seasons or campaigning during
election years. But, he adds, "if a CR were to go on for six months
or more, we'd have a problem."

Unlike the SBA and agencies with relatively fixed missions,
CDC's priorities can change from one year to the next—or even
within a single year, depending on events. The agency's IT
spending must remain somewhat flexible so it can respond quickly
to moving targets, including an outbreak of disease or a public
health crisis.

CDC and other agencies try to push discretionary IT spending
out toward the end of the year, when funds are available. Some
agencies build flexibility into their budgets to allow, for example,
taking money from travel and training budgets to spend on more
time-critical expenditures.

However, if IT purchases are tied to a line item in an
unapproved budget for the new fiscal year, getting money available
through a CR repurposed to buy something not specifically
covered by that line item could take, well, an act of Congress.

Since at least the 1870s, Congress has used continuing
resolutions to provide interim funding when an appropriations
measure is delayed. However, there is no typical CR.

Some are relatively thin documents but, because a
CR is generally regarded as must-pass legislation, members
of Congress may load CRs with unrelated amendments to quickly
enact stalled legislation. On a few occasions, CRs were vehicles for
passing the entire proposed federal budget—the same budget that
was mired in committee or protracted debate.

Congress has enacted CRs 97 times since the fiscal 1977 budget
cycle. However, since 1987, the Congressional Research Service
reported, the nature, scope and duration of CRs have evolved from
interim funding measures for a brief period to measures that provide
funding for the remainder of the fiscal year—in essence passing a
budget not vetted by the full congressional budget process.

"This is not good, nor should it be acceptable," states Maya
MacGuineas, executive director of the Committee for a
Responsible Budget, a Washington, D.C.-based bipartisan group
comprising former White House budget directors and
former congressional budget writers. "The frequent use of
continuing resolutions reflects an ongoing breakdown
in the budget process. Good budgeting allows people
to plan for the future, and this makes planning all that much more
difficult," says James Giammo, budget officer and deputy
controller of the National Park Service, a bureau within Interior.
Although he concedes that agencies can squeak by on prior-year
spending levels for routine operations, he says that new programs
with built-in, performance-based measurements become virtual
train wrecks.

In large multiyear initiatives, an agency plans each year's
milestones and other measurements based on full-year funding.
However, derailing the regular funding process and
replacing it with a CR and prior-year spending limits
don't allow the agency to avoid responsibility for
meeting its milestones and measurements, even though it may
have to wait months for funding to start work on the program.

One federally mandated initiative at Interior calls for
the agency to establish an integrated enterprisewide
security network to replace its existing bureau networks and to
comply with governmentwide mandates for IT security. The
prospect of a delay in fiscal 2005 funding—and an
attendant delay in meeting the initiative deadlines—concerns
Giammo.

"This would be a terrible way to run a business," Giammo says
of the federal budget process. "It destroys all aspects of
performance-based planning."

The fact is, government isn't a business. Some similarities exist,
but the politically charged budget process clearly differentiates
government from business. Until that changes, procurement and
budget officers have little choice but to deal with it—one
continuing resolution at a time.