Budget uncertainty is routine. What makes 2018 different?

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Continuing resolutions and funding uncertainty are staples of appropriations cycles. But there are some factors that make fiscal year 2018 different from years past.

"We're in a very tough year here with fiscal year [2018]," Professional Services Council President David Berteau said during an Aug. 15 budget update.

Berteau pointed to the February budget deal that significantly raised defense and civilian caps "and the subsequent increase in funding in appropriations" as a particular challenge with the fiscal year set to end Sept. 30.

"This is an enormous increase with only six months left in the fiscal year in which to obligate and expand those funds that have to be done by the end of the year," he said. "And when you add in another month of time it takes for [the Office of Management and Budget] to actually apportion the funds and distribute them to the agencies, agencies have been under tremendous pressure to take care of the funding they've received and to do the work necessary that's covered by that funding."

The looming midterm elections add to the challenge, Berteau said.

Additionally, agencies are "constrained" by the lack of time and staff to carry out their responsibilities, he said. "This is not enough time," and the number of contract managers, officers and other employees "haven't grown in proportion to the increase in funding."

Berteau also noted another factor constraining agencies: the current administration's stances towards some spending.

"There's been some indication from the administration that they would not be unhappy if some of these funds were not expended," he said, pointing to public statements made by members of the administration.

In February, OMB Director Mick Mulvaney emphasized that the raising of the spending caps does not mean that money has to be spent. 

Additionally, at the end of July, President Donald Trump renewed his threat to shut down the government if border wall funding and votes for border security were not included in the spending bill that hits his desk.

One sign of movement was the recent signing of the 2019 National Defense Authorization Act.

The early passage of the NDAA "sets the ground work, but it is not the end game," said Berteau. "By providing it early enough, it provides both the basis for those appropriations … and it gives Defense Department and all the contractors a much clearer idea of what's going to be coming in 2019, assuming the appropriations come into play.

Another aspect of appropriations unique to 2018 is the existence of the central Technology Modernization Fund. The revolving fund received $100 million in funding this year, but Senate-side appropriators recommended zeroing out the funding for fiscal year 2019.

Berteau said it's "more than likely" TMF will retain fiscal year 2018 funding levels "unless there's a specific request or anomaly that would eliminate that."

PSC Executive Vice President and Counsel Alan Chvotkin also noted that "there's still funds left over from the 2018 appropriations that are available for new projects."

And due to the nature of the fund and the payback requirements, "if there's any recovery from those projects back into the fund, those would also be available," he said.

For agency-level working capital funds, "it'll certainly require some additional congressional action -- whether that's appropriations or authorization or some other activity -- in order to make those agency-specific funds activated and dollars made available."

But in the event of a continuing resolution, Berteau said "it's unlikely" these questions surrounding the agency-level working capital funds will be addressed.

About the Author

Chase Gunter is a former FCW staff writer.


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