While the full impact of operating under continuing resolutions is difficult to quantify across the Defense Department, a government watchdog found that stopgap funding measures have led to program delays, increased costs, administrative burdens and operational challenges.
For the past five decades, the Pentagon has relied on temporary funding measures at the start of nearly every fiscal year — the department has operated under continuing resolutions in all but 12 of the last 49 years. In eight of the past 15 fiscal years, those continuing resolutions lasted more than three months.
The Government Accountability Office has previously examined the effects of CRs on agencies across the federal government, but in 2024, Congress directed GAO through a provision in the Senate report accompanying the annual defense policy bill to assess their impact on DoD operations and acquisition programs.
“Given the direction that we had in the provision, we selected a sample of operation and maintenance activities and acquisition programs that we determined were likely to be affected by CRs and that were aligned with DoD strategic priorities. Our goal was to provide illustrative examples of how DoD activities and programs were specifically affected by CRs and … that are critical to the national security mission,” Rashmi Agarwal, director in the Government Accountability Office’s defense capabilities and management team, told Federal News Network.
Agarwal said GAO surveyed about 74 acquisition programs — roughly half reported they experienced scheduling delays or financial impacts. The remaining programs reported little or no impact, but the watchdog did not examine the reason those programs were unaffected as it fell outside the scope of the review.
Cost increases
Agarwal said her team found that temporary funding can increase costs in multiple ways. For some of the acquisition programs, continuing resolutions have led to placing smaller orders over the course of the year, limiting their ability to secure lower prices through larger purchases.
Programs can also suffer from increased costs due to inflation, changes in foreign exchange rates, or vendors requiring more time to finish work within a compressed timeframe.
At Joint Base San Antonio, for example, officials told GAO that the fiscal 2024 continuing resolution more than doubled the cost of a facilities sustainment contract — the project’s original estimate rose from $579,000 to roughly $1.45 million after full-year funding was passed.
Officials also faced higher costs for the removal and installation of heating, ventilation, and air conditioning systems — a contractor initially quoted the project at about $400,000. When the work was rebid later in the year due to delays caused by a continuing resolution, the revised quote was more than $78,000 higher.
Delays
Navy officials told GAO that continuing resolutions led to delays in awarding Navy ship maintenance contracts since during periods of constrained funding they had to prioritize the most urgent needs. Officials said available resources would typically go toward ships already undergoing maintenance, ships nearing deployment or those requiring emergency repairs.
“Ships with maintenance needs that were not prioritized during a CR face potential delays in preparations for future maintenance work, such as equipment purchases or planning and design efforts, while waiting for final full-year appropriations. These delays further contribute to existing delays related to previously deferred maintenance,” the GAO report reads.
Meanwhile, Army officials told GAO that work at maintenance depots was delayed since depots can only accept so much maintenance work in a given year due to limited capacity and continuing resolutions slow the Army’s ability to send equipment for repairs.
Uneven spending over the course of the fiscal year
Since CRs create uncertainty for federal agencies about when they will receive final appropriations and how much funding ultimately will be available, Agarwal said they found that spending is often more limited at the beginning of the fiscal year. But once full-year appropriations are enacted, agencies are rushing to obligate remaining funds within a compressed timeframe.
“When that happens, we found that activities and programs can still face constraints in being able to spend the funding that they have available. For example, the contracting offices may not have the capacity to solicit and award all the contracts that need to be awarded, or vendors may not have the capacity to complete all the projects that need to be completed,” Agarwal said.
Research and development and procurement accounts are especially affected by longer continuing resolutions.
Workforce productivity
Continuing resolutions have also created administrative burdens and inefficiencies for DoD personnel who have to repeatedly adjust spending plans due to CRs.
Officials from the F-35 program, for example, estimated that about 20% of their financial management staff’s time is spent adjusting budgets to manage through CR constraints.
While GAO did not issue any recommendations, a separate Defense Department Inspector General report found that improving processes to track the actual impacts of continuing resolutions would help the department better communicate the consequences of CRs to Congress — the IG recommended developing a standardized method for tracking the specific impacts of CRs, particularly for acquisition programs.
“I think if the department takes action on the DoD inspector general’s recommendation, they are going to obtain that data, whether it’s cost data in terms of the contracts that got extended as a result of CRs, for example. But I think if they take action on that recommendation that would enable a better assessment of the CR-related impacts,” Agarwal said.
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