For the fourth time in FY 2024, Congress appears to have avoided a government shutdown . . . temporarily. What should contractors know?

Congressional leaders and the White House have an agreement to temporarily avert a federal government shutdown, again. If enacted, the agreement would extend the funding deadlines to half of the federal government to March 8 and the other half to March 22. The House of Representatives is poised to vote on the agreement (known as a short-term continuing resolution) on February 29, when this article is published. In the event of a shutdown, direct federal and federal aid contractors may refer to AGC’s document entitled: What to Know in the Event the Federal Government Shuts Down.

As noted, the agreement deals with temporarily funding federal agencies and programs in two parts and under two timelines, specifically:

• the funding expiration date moves from March 1 to March 8 for four areas of the federal government: (1) the U.S. Department of Transportation and U.S. Department of  Housing and Urban Development; (2) Military Construction (e.g., U.S. Army Corps and U.S. Naval Facility Engineering Command mil-con programs) and U.S. Department of veterans Affairs; (3) the U.S. Army Corps of Engineers Civil Works Program and Department of Energy; and (4) U.S. Department of Agriculture. The funding expiration date, however, for the Department of the Interior, Environmental Protection Agency, and the General Services Administration, for example, would remain March 8.
• Remaining federal agencies and programs would be temporarily funded through March 22. These include but are not limited to the U.S. Departments of Defense, Education, Labor, Homeland Security, Justice and State.

Hanging above this situation like the sword of Damocles, Congress enacted in the debt limit deal in May 2023—under the Fiscal Responsibility Act—a provision whereby automatic spending cuts will take effect on April 30 at levels one percent below what was enacted in the FY 2023 appropriations, if full year appropriations bills are not passed. The cuts, however, would be felt more on the non-defense funding side than defense funding side. According to the Congressional Budget Office, this would translate into across-the-board reductions ranging from five percent to nine percent for nondefense funding and from zero to one percent for defense funding, depending on when appropriations were enacted and what form they took.

AGC continues to fight for increased construction investment and certainty in the federal funding process.

For more information, contact Jimmy Christianson at [email protected].