Near the end of each and every fiscal year, government agencies, for one reason or another, that were unable to fully obligate their budgeted funding completely and according to plan, find themselves going on "spending sprees" to ensure they completely exhaust those ever-more-scarce dollars available.
Every contract manager is well aware of the implications of the end of a fiscal year. Taking time off for annual leave is often prohibited during August and September while this heavy deluge of procurement requests from the many project managers rolls into the contracting offices — up to 80 percent of annual contracting obligations are often made in the last two months of each fiscal year. While "poor planning" on the part of requirements officials is no excuse for a crisis on the part of the contracting officer, the fact remains that contracting professionals are the final step in a process that starts with agency requirements and project managers determining their mission resource needs, including those to be fulfilled by contract.
This activity has become more pronounced in recent years, given the result of congressional appropriations dysfunction, whereby appropriations are generally not authorized in a timely manner, such as reasonably close to the start of a fiscal year in which they must be contractually obligated. Thus, agencies have ever fewer months in a fiscal year in which to execute their budgets. Instead of managing a 12-month budget beginning at month one, they may not know what their budget is until month three, four, six, etc. Agency priorities are compressed into fewer and fewer months and weeks and "the end of the year fiscal rush" becomes even more "rushed."
Government agencies have long learned to adapt priorities (or "wish lists") to move forward when funding may soon expire. These have historically included personal computers, furniture, carpeting, and other forms of housekeeping items. However, as the unknown dates of full annual funding become pushed further and further back into the fiscal year, the end-of-year rush starts to incorporate many basic agency mission activities, dependent upon contractor support. As many agencies are heavily reliant on obtaining products and services by contract, the reality of how this can occur without the required funding up front, with adequate time to buy smartly, and using agile practices, becomes increasingly at issue. Funding not filtering down to program managers until as late as the third or fourth quarter is no longer unusual.
Rapid actions at the end of the fiscal year, with contract managers working feverishly as the clock winds down, is never a recipe for prudent acquisition, not to mention management. In recent years, the rush starts almost immediately once the budget is finally passed, with less than half of the year remaining before funds expire.
Stop-gap funding mitigates this issue somewhat, but obviously the best response is program execution that occurs on time — after proper planning and before the fiscal year begins. The costs of today's late budget to the taxpayer (who pays for it), or the citizens and constituencies thereby underserved, leaving aside the frustration and dismay of acquisition officials, is readily measured.
While contract managers — as well as finance, program, and indeed contractors — have all learned to muddle through (such as contractors willing to work "at their own risk" without a contract or guarantee of payment), they shouldn't have to. This situation often includes the uncertainty of funding to maintain even their own employment. However, through their ingenuity, perseverance, and especially creativity, along with other government career professionals, they keep the trains running, despite the obstacles created by our current political polarization.
Michael P. Fischetti is the executive director of the National Contract Management Association.
