What a Continuing Resolution Means for Federal Contractors, Agencies, and Appropriations Strategy
Entities that rely on or are regulated by federal agencies should keep an eye on the federal budget appropriations process, which determines how discretionary spending is allocated throughout the government. While the goal is to provide funding and certainty for a full year, when appropriations measures aren’t passed in time, a continuing resolution keeps money flowing.
The federal government funds a wide range of programs and activities through legislation enacted by Congress. The annual federal appropriations process determines how discretionary spending is allocated. But when federal budget appropriations measures are not passed and approved by the deadline, a continuing resolution (CR) can keep the government running.
In this article, get the facts on the strategic implications of continuing resolutions for federal contractors, agencies, and government affairs professionals – as well as timely tips for how to manage the uncertainty that can accompany these measures.
Summary:
- Continuing resolutions are common and generally continue federal spending at the previous year’s level with adjustments.
- While continuing resolutions keep the government running, there are potential downsides.
- In this dynamic environment, government affairs professionals and other stakeholders should leverage digital tracking tools and maintain a curated network of contacts to stay informed on budget priorities.
- Bloomberg Government can help you track and analyze the federal budget, appropriations, and funding trends.
[Navigate the complexities of the federal budget process with confidence with our Guide to Federal Budget Dynamics. It covers everything from appropriations to budget reconciliation to legislative strategy.]
What is a continuing resolution and when is it used?
A continuing resolution is a temporary spending bill that is used when Congress and the president have not approved final appropriations by the Oct. 1 start of the federal fiscal year. A CR allows the federal government to continue operations and avoid a partial government shutdown for nonessential discretionary functions.
Continuing resolutions have six main features, according to Congress.gov:
- Coverage, which determines which activities are subject to the resolution
- Duration, which refers to the time frame that CRs provide budget authority
- Funding rate, the rate at which agencies can use funds
- New activities, which are generally prohibited under the CR unless directed otherwise through provided legislation
- Anomalies, which can serve to adjust the duration and amount of funds in the CR, and purposes for which they may be used for the specified activities
- Legislative provisions, which are included in some instances to create, amend, or extend other laws
CRs are common and often continue federal spending at the previous year’s level to allow additional time for the appropriations process. In fact, Congress has enacted at least one continuing resolution in all but three of the fiscal years since 1977. And from fiscal years 2010–2025, there were 57 CRs in all, with a range of 1 day to 176 days, according to Congress.gov.
While continuing resolutions often are shorter in duration and can span mere days, they also can extend to a full fiscal year. All appropriations in fiscal 2025 was provided under CRs, with two short-term ones – one from Oct. 1, 2024, through Dec. 20, 2024, and the second from Dec. 21, 2024, through March 14, 2025 – and a full-year measure signed by President Donald Trump on March 15, 2025.
There have been multiple funding gaps under the modern budget process, and four federal government shutdowns have affected operations for more than one business day in the absence of approved CR bills: The first two shutdowns in 1995 to 1996, the third in 2013, and the fourth (a partial shutdown) from December 2018 to January 2019.
A partial government shutdown may occur if Congress has passed some appropriations bills, but not all of them.
While useful, CRs come with a downside because such stopgap funding can leave new priorities unfunded, inhibit new initiatives, and continue older funding that government affairs professionals and their clients would rather see changed.
[Download our comprehensive Guide to Federal Budget Dynamics to master the complexities of appropriations, budget reconciliation, and strategic advocacy.]
Strategic impact on agencies and budget planning
Agencies usually begin to formulate their budgets about 18 months before the beginning of the fiscal year on Oct. 1. But a great deal can change in that time frame when it comes to agency priorities.
While continuing resolutions can keep the government running at its prior year fiscal funding level and allow more time for the appropriations process, they also can affect how agencies plan and carry out their programs and activities.
As federal agencies continue to operate under prior year funding levels, there are potentially negative effects on their ability to do strategic planning and agency activities, such as limits on new programs and capital investment as well as delays in guidance, grant cycles, hiring, and even training.
For example, the U.S. Department of Health and Human Services and its grantees reported that uncertainty from CR delays can make it difficult to provide summer cooling assistance to households under the Low Income Home Energy Assistance Program, according to a 2022 report from GAO to congressional requesters.
Continuing resolutions also result in administrative deficiencies and limited options for management tasks for federal agencies, as financial and human resources staff must spend time planning for a potential government shutdown when CRs are poised to expire without another approved CR or appropriation in place.
Uncertainty around funding – such as the inaccessibility of travel funds – can make it difficult for staff to carry out on-site program monitoring and other management tasks that require travel.
These issues can linger even after full-year spending is passed, especially if approval comes later in the fiscal year.
“If the spending level is cut in an agency’s final appropriation, but the agency had been operating at a higher, prior-year annualized rate under the CR, it may have to drastically adjust operations during the latter months of the fiscal year to avoid overspending,” reports the Bipartisan Policy Center.
That said, some agencies may have more budgetary flexibility than others under a CR, such as multiyear appropriations or anomalies, which can help mitigate the effects of this stopgap funding measure.
For example, in the yearlong continuing resolution enacted in March 2025, the Department of Defense received $892.5 billion top line and the most flexibility of all agencies, with multiple anomalies. In fact, the March 2025 CR gives DOD officials authority to initiate new programs if they meet certain requirements, according to a summary of the legislation.
Without such flexibility available, some agencies will make certain adjustments to avoid budgetary setbacks. For example, appropriations law does not allow agencies to transfer funds between accounts, and making these transfers without specific statutory authority is illegal.
However, the rules against reprogramming funds within an appropriations account vary among agencies and appropriations subcommittees, so some agencies may routinely move funds around within accounts as needs shift.
Implications for federal contractors
CRs help avoid government shutdowns, which can have dire implications for federal contractors. But continuing resolutions can still have a significant impact on these workers because the short-term nature of these bills results in uncertainty.
Although CRs allow current contracts to continue, federal contractors may have to deal with modifications or extensions, or confusion about task orders, as federal agencies adjust their budget strategies under these measures.
Contractors also may have difficulty making hiring decisions with the absence of confirmed long-term funding and may need to ensure they have enough cash flow or reserves to cover activities in case long-term funding does not materialize – or in case of other delays.
In addition, because CRs extend funding from the previous year’s levels, and thus have limitations on funding for new activities, they can limit the release of new contracts and affect the ability of contractors to pursue new business opportunities.
Finally, federal contractors must take extra care to stay on top of all compliance requirements to reduce the risk of audit issues after a CR is enacted. So, these workers should stay informed about legislative developments and proactively plan for current and future activities.
Appropriations strategy in a CR environment
The private sector may have increased anxiety about the possibility of government shutdowns, in addition to concerns about what will happen under a continuing resolution. Government affairs professionals should continue to monitor congressional actions and be prepared to answer questions about the legislative process and potential impacts for their clients.
For example, continuing resolutions can give the executive branch more discretion over some spending decisions. So, in a CR environment, government relations professionals should stay on top of their regular work to communicate with lawmakers and their staff, but they also should continue to follow budgetary developments and prepare to shift priorities or communications as needed.
Government affairs professionals, federal contractors, federal agency staff, and legal and compliance teams managing federal funding risks should review their current priorities and prepare for potential changes in federal funding priorities – especially those related to grants or areas that are likely to see budgetary reductions – in addition to reviewing opportunities for new funding streams.
[Download our comprehensive Guide to Federal Budget Dynamics to master the complexities of appropriations, budget reconciliation, and strategic advocacy.]
The link to budget reconciliation
Within a CR environment, there also is a link to budget reconciliation, the expedited process used to consider bills that would implement policies outlined in a congressional budget resolution.
Lawmakers can use this tool – which is especially valuable when one party has control of the White House and Congress – to advance spending and tax policies through the Senate with just a simple majority rather than the 60-vote supermajority that applies to most legislation under the chamber’s cloture rules.
These details make reconciliation bills an attractive target for policy changes that have a budgetary effect, such as health-care programs.
Notably, 23 reconciliation bills have been enacted since 1980 (when both chambers first used reconciliation procedures), including policy initiatives such as the Deficit Reduction Act of 2005 and the Health Care and Education Reconciliation Act of 2010.
However, the rules related to this process – such as the fact that provisions must be directly related to the budget to comply with the Byrd rule – can limit the scope of policy overhauls.
In 2025, the Republican-led Congress leveraged budget reconciliation to advance its policies. On July 4, 2025, President Trump signed reconciliation legislation dubbed the “One Big Beautiful Bill Act” containing changes across sectors including social programs, health care, and taxes.
Government affairs professionals should make sure to understand the progress that key committees are making with specific provisions that relate to their advocacy goals and engage with congressional offices to advocate for the inclusion of their desired language in any reconciliation provisions.
Planning for CRs vs. omnibus packages
Because CRs are temporary stopgap funding measures, in these environments government affairs professionals also should keep a watchful eye on the timing for each CR, and adjust their advocacy efforts accordingly, as Congress can pass multiple CRs to cover an annual funding period.
If Congress seeks to pass omnibus measures, which it has used more frequently in recent years to combine some or all of the regular appropriations bills into a single measure, government affairs professionals must make concerted efforts to manage the uncertainty and last-minute changes that can result.
For example, because of their timing, scope, and political elements, omnibus measures can be used by Congress to address other legislative priorities, such as extending or amending existing authorizations and including legislation that establishes new programs, projects, or activities.
Professionals must set aside time to review the scope of these (sometimes “must-pass”) bills to determine how their advocacy goals fit in, as these measures can include policies that wouldn’t otherwise make it to the floor. Plan for potential delays and last-minute adjustments for these sprawling packages.
And despite any uncertainty, government affairs professionals can still pursue their advocacy goals by keeping their communications clear and brief, and by continuing to mobilize stakeholders in support of key goals in the weeks and months ahead of votes, such as by encouraging them to also contact lawmakers or participate in campaigns.