This past February, President Donald Trump and Congress ended weeks of turmoil after agreeing to a bipartisan budget package. That agreement extended the continuing resolution until March 23, when a bill was passed that ended the financial back-and-forth seen over the previous months and funded the government through Sept.30, 2019 – the end of that fiscal year.
This resolution authorized a significant amount of spending. Most of it was allocated to the Department of Defense, but many civilian agencies gained as well. This information should come as great news to government contractors, as the bill lifted the sequester on government spending and gives them more stability. It also eliminated the possibility of a government shutdown – which, as Washington Technology pointed out, has already happened twice this year – for 18 months. Contractors can now breathe a sigh of relief, knowing they won't have to worry about such uncertainty again until the end of September 2019.
A breakdown of the bill
By fully repealing the sequester through fiscal year 2019, the budget bill effectively boosts government spending for the DoD by $54 billion for both FY18 and FY19, per the law firm Venable LLP. Furthermore, it includes an additional $31 billion above the sequester cap for FY18.
The repeal also brings $37 billion to civilian government agencies across both fiscal years, plus $31 billion above the sequester gap for FY19. Per Venable LLP, the total non-defense funding cap is $117 billion higher than what the Trump administration requested for the FY18 budget. Some are concerned that these agencies won't find use for these funds, but Congress attempted to allay these fears by pledging certain amounts to various initiatives, including:
- $20 billion for infrastructure, including surface transportation, clean drinking water, rural broadband, energy infrastructure and rural water and wastewater.
- $6 billion to help solve the opioid epidemic and assist with mental health care.
- $5.8 billion for the Child Care Development Block Grant program.
- $4 billion for initiatives that help make college more affordable (including those helping teachers, firefighters and police officers).
- $4 billion to improve VA clinics and hospitals.
- $2 billion for research at the National Institutes of Health.
Congress also directed some of this funding to initiatives that will increase emergency response and further invest in healthcare. FEMA, for instance, will receive $23.5 billion, while the Army Corps will get $15 billion. Furthermore, the bill allocates $28 million in community development block grands for economic revitalization, housing, infrastructure repairs and more.
To help people in areas affected by last year's numerous natural disasters, Congress committed $4.9 billion in Medicaid funds for Puerto Rico and the U.S. Virgin Islands. Another $2.36 billion was granted to Florida disaster assistance.
The healthcare commitments included more than $7 billion in funding for community health centers, $253 million over two years for teaching health centers and $620 million over two years for the National Health Service Corps.
Benefiting from the recent budget bill
While the budget is definitely good news for government contractors, these businesses must still face competition with each other. It's true that there is more money to go around, but contractors aren't guaranteed a portion unless they prove their usefulness to the government.
As such, these organizations should position themselves as the best resources to solve the various civilian issues listed above, as well as those faced by the DoD. Successfully securing contracts is all about marketing and cost-effective pricing.
That said, the end to the financial uncertainly that prevailed over the past few months is nothing short of great news.