Key points covered in this article:

  • Continuing Resolutions (CRs) are a recurring part of the federal budget process, creating uncertainty for government contractors by delaying new funding and awards.
  • Contractors can navigate CR challenges by forecasting multiple budget scenarios, prioritizing pipeline opportunities, and embedding budget realities into proposal planning.
  • Building strong agency relationships during slower periods can provide valuable insights and position contractors for success when funding clarity arrives.

There you are on January 31st, staring at your inbox like it is a particularly unhelpful Rubik’s Cube. Updates on appropriations scroll by slower than DC traffic on Friday at 5 pm. And yet again, Congress has not passed a full federal budget. Cue another Continuing Resolution (CR), that annual Beltway ritual that feels a bit like Groundhog Day in Washington.   

For the uninitiated, a Continuing Resolution is Congress’s way of saying “well… not yet.” It keeps funding flowing at last year’s levels, so the government does not shut down, yet imposes restrictions on new spending or activities until a real budget lands.   

In other words, it is stopgap funding, not certainty. And if you are a government contractor waiting for clarity on new awards, proposals, or staffing plans, it feels like watching paint dry in the Arctic.  

But here is the good news: this is not a random glitch in the matrix. It is the new normal, and if you treat it like a nuisance instead of a strategic challenge, you are doing your business a disservice.  

 A CR by Any Other Name… Is Still a CR

Let us be blunt: continuing resolutions are not rare. They have been enacted in virtually every fiscal year since the budget deadline shifted to October 1st in the late 1970s. None of this is accidental, and it is not new. 

Continuing resolutions have been part of the federal budget process for decades. Since the late 1990s, they have been used again and again, and sometimes stacked on top of each other, leaving agencies to operate under temporary funding for far longer than anyone pretends is ideal. 

If you are a contractor, that is not chaos. That is the environment. 

 Why This Actually Matters for GovCons

You might think, “as long as the contracts keep running, we’re fine.” And yes, your current task orders will probably continue under CRs; that is, sort of the whole point. But here is where it gets interesting.  

Agencies with CRs cannot obligate funds for new programs that have not been funded in the previous year. That combination usually leads to fewer new RFPs coming out the door, solicitations slipping to “later this year,” and a pipeline that suddenly feels much slower than whatever spreadsheet said back in December. 

When business development planning is built around neat annual cycles, this is often where that assumption starts to show its limits. Things do not fall apart, exactly. They just do not  line up the way they normally would. Meetings take longer to land anywhere useful, decisions drift, and progress feels slower than whatever the original timeline suggested. 

On the operational side, the effects are usually subtle. Agencies hesitate while funding questions remain unresolved. Hiring decisions get pushed, training gets delayed, and new roles can sit open without much movement. Agencies have pointed to these kinds of slowdowns during extended continuing resolutions, particularly when they’re trying to keep day-to-day work moving without knowing what the budget will ultimately support. 

Over time, those pauses compound. Work gets spread across teams differently. People stretch a bit more than planned. Schedules loosen in small ways that aren’t always obvious at first. None of it is dramatic, and none of it is unusual on its own, but taken together it changes how priorities get set and how quickly anything can realistically move forward. 

And then there is cost and schedule,  the part people still like to argue about until the data catches up. Recent GAO reporting has pointed to delays and cost increases tied directly to prolonged continuing resolutions, including, within defense programs that are otherwise considered high priority. In some cases, sustainment costs increased simply because schedules slipped and decisions could not be made timely. 

So looking at it from  a contractor’s perspective, that is where uncertainty turns expensive. Not all at once, but gradually, through stretched schedules, added administrative effort, and forecasts that start to drift away from reality. 

 This Is not a Shutdown (Well Not Usually)

A continuing resolution keeps agencies funded, but it does not give them much room to move. Anything that was not funded the year before generally stays off the table, no new starts, no big expansions, no sudden bursts of innovation. 

The result can feel oddly disorienting. Work continues, but progress does not always follow. It is a bit like realizing halfway through the day that you have been walking on a treadmill you never agreed to use. You are doing the work, you are expending the energy, but nothing is actually moving forward. 

That disconnect shows up quickly in business development conversations. Contractors walk in expecting momentum, while agencies are still trying to reconcile last year’s numbers and decide what, if anything, they are allowed to move on to next. 

 What Should GovCons should Actually do then?

Well, first, do not panic, and no waiting it out. What tends to work better is accepting uncertainty as part of the baseline and planning from there. Contractors who do this don’t assume a single budget outcome; they plan around several plausible ones. 

1. Forecast
Sometimes appropriations arrive more or less on time. Sometimes a short-term CR bridges the gap. Other times, funding drags on for months, pushing awards further into the year than anyone originally expected. When those scenarios are built into forecasts early, delays become manageable instead of destabilizing. 

This is how cerebral budgets become useful.  

2. Prioritize Pipeline Prudently
If new opportunities are stuck on hold, do not just wait; track strategic priority notifications and early industry days. Your best shot at winning when the budget lands, is being top of mind before it arrives. 

3. Embed Budget Reality into Proposal
Work Budget reality also needs to show up much earlier in proposal work than it often does. Some contractors do not really engage with their pipeline until a final budget is in place, which sounds sensible in theory, but rarely does this work in practice. By the time certainty arrives, everyone else has already been preparing for months. 

A more practical approach is to assume some level of disruption and build that into capture planning and pricing assumptions from the outset. It does not mean guessing wildly. It means recognizing that timing, scope, and award schedules are rarely as neat as the original plan suggests, especially in a CR environment. 

4. Relationships
When faced with longer decision timelines, these can also work in your favor if you use them well. When awards slow down, relationships matter more, not less. Contractors who stay engaged during these quieter periods often develop stronger lines of communication inside agencies. Those conversations do not always lead to immediate movement, but they do provide context and occasionally early signals that never show up in a public notice. 

The Bigger Picture

Agencies are not particularly comfortable with this uncertainty either. Continuing resolutions make hiring harder, slow internal decision-making, and squeeze planning windows in ways that add friction to everyday operations. 

What really matters most though, is what happens next. In some organizations, uncertainty becomes a reason to wait. In others, it becomes something to work around. Over time, that difference shows up in how prepared the teams are, when decisions, finally move forward. as something to endure until it passes. Others accept it as part of the environment and adjust accordingly. Over time, the second group tends to be better positioned when things finally do move. 

Whether it’s multiple short CRs or one that drags on longer than expected, success rarely comes from waiting for perfect clarity. It usually comes from being prepared enough that, when clarity does arrive, you’re already in motion. 

Budget uncertainty is not going away, and at this point it is hard to treat it as a one-off disruption. It is part of how the federal fiscal process actually works, for better or worse, and planning tends to go more smoothly when that reality is acknowledged rather than resisted. 

The contractors who seem to handle it best are not doing anything flashy. They do not freeze, and they do not overreact. They adjust. Plans stay flexible, pipelines are managed with a bit of slack, execution stays tight where it can, and relationships do not get neglected just because decisions are moving more slowly.  

Because certainty might be mythical but certainty about your response to uncertainty? That is absolutely achievable.

For guidance on how to prepare your organization, contact Neena Shukla, Government Contracting Team Leader, at PBMares.