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By Nick Wakeman

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Nick Wakeman

Hope fades for long-term budget fix

Am I the only one experiencing a sense of "deja vu" with another government shutdown looming at midnight on Friday?

Any hope of any kind of full-year appropriations being passed is pretty much dead. Hope was torpedoed last week when an immigration compromise blew up during a meeting at the White House.

The current continuing resolution expires at midnight on Friday. My guess is that there will be some sort of deal for another continuing resolution to extend funding through February.

When the CR was passed in December, Congress and the White House gave the impression that they just needed a bit more time to iron a final deal. And it looked like they were headed in a positive direction for a while. But now who knows?

There is a possibility that the government could shut down on Friday but reopen by Monday after Congress and the White House agree to a deal over the weekend.

Politically, no one wins with a shutdown.

So we get another CR by Friday or Monday, but what worries me is that it seems as if the Democrats and Republicans and the White House and Congress are moving further apart and not closer. A final appropriation seems like a harder proposition than it once did.

Could we actually end up with a CR for the entire year?

That would mean no money for a border wall or extra money in general for border security. No deal on immigration.

No increase to defense spending despite wide expectations of such. And let’s not forget about infrastructure.

Several pillars of Trump’s presidential campaign will continue to languish.

So where does that leave government contractors? There is good and bad news.

The worst news of course is little-to-no funding for true new starts on programs. The Modernizing Government Technology Act will have a very limited launch without appropriations. And there still is a backlog of open positions that makes it a challenge for any new initiatives to begin.

But on the somewhat brighter side, the mission of government goes on. There will still be work to be done. So the role for contractors will not be diminished.

I’m also seeing a trend where contractors and their customers are working modernization efforts into their sustainment efforts. This is not a solid long-term solution but is better than nothing.

On the face of it, this scenario should favor incumbents but the expectation is that there will be intense competition for any recompete award. There is also the possibility that contracts just get extended instead of recompeted.

This week we wait and watch Capitol Hill and the White House. A long-term budget is out of the question but a CR should be easy to broker before Friday.

But as we’ve learned over the past year, anything can happen.

Posted by Nick Wakeman on Jan 16, 2018 at 10:52 AM

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