Measuring the Effects of Federal Budget Dysfunction: Impacts of Continuing Resolutions on Public Procurement

• Published date: 01 October 2023
• DOI: http://doi.org/10.1177/02750740231165015
• Author: Spencer T. Brien,Korey W. Letterle,Paul A. Kantner
• Date: 01 October 2023
• Subject Matter: Articles

Measuring the Effects of Federal Budget

Dysfunction: Impacts of Continuing

Resolutions on Public Procurement

Spencer T. Brien

1

, Korey W. Letterle

2

and Paul A. Kantner

2

Abstract

This study measures the behavioral effects of continuing resolutions by examining their impact on federal procurement activ-

ities. The restrictions imposed by continuing resolutions are explored as an example of political control over a public orga-

nization. The analysis employs a dataset describing the timing of U.S. Marine Corps purchase orders for goods and services.

Individual purchase orders were sampled over a four-year period (2016−2019) that endured continuing resolutions of differ-

ent lengths. The analysis examines the impact of continuing resolutions on the number of purchase orders initiated, the dura-

tion of their review period, and the dollar amount per request. The results depict multiple impacts that appear to concentrate

on requests for services rather than commodities. These f‌indings help quantify the mag nitude of the disruptions caused by

federal budgetary dysfunction.

Keywords

federal budgeting, continuing resolutions, public procurement, defense budgeting, legislative relations

Introduction

In the ideal budgetary process, the U.S. Congress passes a

budget appropriation act that is signed into law by the presi-

dent prior to the start of the new f‌iscal year. This act provides

federal agencies with the legal authority to obligate funds

from the U.S. Treasury to pay for labor, goods, and services.

Unfortunately, timely passage of the appropriation bill is the

exception rather than the norm; between 2003 and 2018 the

budget was passed on time in only four years. Looking

even further back, Joyce (2008, p. 954) reported that in the

32-year period ending with FY2008, the budget was passed

on time only four times.

When the U.S. Congress fails to pass a spending authori-

zation prior to the start of the f‌iscal year, it avoids a govern-

ment shutdown by enacting a continuing resolution (CR).

This provides a temporary stopgap by authorizing federal

agencies to continue to operate under signif‌icant restrictions.

The CR extends the prior year’s budget authority, enabling

programs authorized under that prior budget to continue,

under certain restrictions. These restrictions include a prohi-

bition on starting any new programs that were not authorized

in the previous year’s budget bill as well as blocking any new

multi-year procurements (Herrmann, 2017). Figure 1 dis-

plays the number of days in each f‌iscal year funded with a

continuing resolution from 2003 through 2022, as well as

the duration of federal government shutdowns when spend-

ing authority has lapsed. In many years, Congress passes

multiple consecutive continuing resolutions when they con-

tinue to fail to pass a full budget prior to the expiration of

the temporary spending authority. Figure 2 depicts the dura-

tion of consecutive CRs for defense appropriations for the

same 2003 to 2022 period.

The basic function of a CR is to avoid a government shut-

down because the enacted budget authority has expired. A

CR may be adopted to achieve particular policy objectives,

but may also occur due to budgetary timing, congressional

politics, or procedural issues (Williams & Wees, 2016,

p. 1). For example, in years with multiple CRs (which our

f‌igures show occurs most years), some only last a few

days. Shorter CRs that last only a few days serve to give

Congress a little more time to f‌inalize negotiations and the

text of the budget; substantive policy decisions are nearly

or already resolved. The use of a CR to maintain spending

at the prior year’s levels may be used by opposing congres-

sional leaders to stall the implementation of a new president’s

agenda. The messy budgetary politics described by Rubin

1

Naval Postgraduate School, Monterey, CA, USA

2

United States Marine Corps, Indian Head, VA, USA

Corresponding Author:

Spencer T. Brien, Graduate School of Business and Public Policy, Naval

Postgraduate School, 555 Dyer Rd, Monterey, CA 93943, USA.

Email: spencer.brien@evergreen.edu

Article

American Review of Public Administration

2023, Vol. 53(7-8) 316–333

© The Author(s) 2023

Article reuse guidelines:

sagepub.com/journals-permissions

DOI: 10.1177/02750740231165015

journals.sagepub.com/home/arp

(2007), which determine f‌iscal legislation, reveal a complex

and conf‌licted set of purposes for continuing resolutions.

In addition to the formal legal restrictions CRs impose,

activities by federal agencies change in a variety of subtle

ways when they operate under continuing authority.

“Agency managers may not know their budget levels from

week to week—sometimes even from day to day—and this

process may go on for months”(Rubin, 2007, p. 612).

Uncertainty regarding current and future budget authority

can cause managers to behave more conservatively in their

spending and operational activities than they would other-

wise. This may manifest as an informal hesitancy or formal

directives from agency leadership to minimize spending

(Herrmann, 2017). These administrative responses create

unintended consequences of a CR that go beyond the

formal legal restrictions on spending Congress imposed.

Public procurement is one setting that may be particularly

disrupted by continuing resolution status. Agencies regularly

need to purchase goods and services from the private sector

to complete their organizational objectives. Continuing reso-

lutions can put formal restrictions on procurement by prohib-

iting new line items that were not authorized in the previous

year’s budget. Even if spending on goods or services is per-

mitted, agencies may give proposed purchases additional

scrutiny to ensure that they comply with legal requirements.

Herrmann (2017) identif‌ies several court cases that struggled

with what actually constitutes a new program start and

whether specif‌ic activities were authorized under the prior

year’s authority. Hermann offers guidance for military

judge advocates making determinations on whether an activ-

ity constitutes a new start based on the category of funds. For

example, the prohibition on new starts applies at the

Department of Defense level, so if Army off‌icials want to ini-

tiate a procurement action for a product that is already being

purchased by the Air Force, it would not constitute a new

start. Military purchase request systems are not fully inte-

grated, however, so it may take additional effort to f‌ind out

whether any other military services are already purchasing

an item. This creates additional work and administrative

burden that would not exist outside of CR status.

Additionally, the risk that when full budget authority

materializes it is less than expected can create further hesita-

tion before spending. The increased administrative burden

may cause some managers to simply forgo procuring

resources and instead try to operate without them

(Willliams & Wees, 2016). Actively planning and preparing

for future periods of f‌iscal constraint is an important part of

strategic public f‌inancial management (Brien et al., 2020).

This study seeks to measure the behavioral effects of con-

tinuing resolutions on agency procurement behavior by

Figure 1. Length of continuing resolutions and government shutdowns by f‌iscal year.

Brien et al. 317