National Association of Government Contractors

Agencies Expected to Spend Excess Funds Quickly

After years of cuts or fixed-pending levels, many federal agencies look to be facing an unfamiliar issue: spending an influx of funds with only several months to get it done.

A recent agreement made by leaders in Congress, which was signed into law by President Trump boosted non-defense discretionary spending for agencies by $63 billion in fiscal 2018.

The measure also included a continuing resolution through March 23 to buy legislators time to write line-by-line appropriations, meaning a forthcoming omnibus bill will give agencies only about six months to spend the new funding before it expires Oct. 1.  With the tight timeline, many expect the spending rush will put pressure on agency staff.

It is expected the boost in spending will put some stain on the grant making, contract professionals, and hiring professionals at many agencies, in addition to the task of ensuring funds are spent wisely.

In addition, the Trump administration has instructed agencies to practice restraint, and work within the reduced spending levels proposed under the president's budget. The White House proposed cutting domestic spending by $54 billion in fiscal 2018. Absent normal planning, the condensed schedule will add pressure on agencies looking to allocate additional funds.

Agencies will contend with years of restrained spending practices, conflicting messages, and a short time frame to figure out how to invest the money they are receiving from Congress.

Legislators are keeping the situation in mind, as they write an omnibus bill that will set spending levels at each agency.

Agencies face a range of uncertainties, although some accounts may end up having extra time to "get the money out the door," there remains the uncertainty that future appropriations bills may rescind the accounts -- while other accounts are scheduled to lapse.

Some accounts have a specific lapse date of Sept. 30. Agencies generally seek to avoid letting funds elapse, as it makes it more difficult to justify future requests for increases. They can ask Congress for rollover authority, but typically only a fraction of what actually remained is awarded.

Many observers expect the agencies will be working diligently to ensure what funding they have at hand, is spent. Ensuring that future budgets are not impacted, by having funds remaining. 

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