On September 2, 2026, the President signed a continuing resolution, or CR, that keeps the federal government funded into the new fiscal year. The law, the Continuing Appropriations and Extensions Act, 2027 (Public Law 119-103), funds federal agencies through December 11, 2026, at the same rate they operated at in fiscal year 2026. The Senate approved it 90 to 6 on August 8, and the House gave final approval 370 to 48 on September 1.
Fiscal year 2027 begins Thursday, October 1, as it does every year. That has not changed. Because the CR is in place, agencies will stay open and keep buying when the new fiscal year starts, and contracts already in place will continue. What the CR changes is how agencies can spend during the first ten weeks of the fiscal year.
What is a continuing resolution?
Each year, Congress passes twelve appropriations bills that set agency budgets for the fiscal year. When those bills are not finished by October 1, Congress can pass a continuing resolution. A CR keeps agencies funded at the prior year's rate for a set period while work on the full-year bills continues.
CRs are the normal way a fiscal year begins. According to the Congressional Research Service, fiscal year 1997 was the last year Congress did not need one. Fiscal year 2025 also began under a CR, signed September 26, 2024. This year's CR runs until December 11 or until Congress passes the full-year bill for an agency, whichever comes first.
What does the CR not change?
The CR does not change your registrations, your certifications or the contracts you already hold.
- Your registrations and certifications. Nothing in the CR touches SAM.gov registration, size standards, or SBA certifications.
- Contracts you already hold. Work under active, funded contracts goes on.
What can agencies buy under a CR?
Under a CR, agencies can keep buying for programs that were funded last year, at last year's rate, but they cannot start new ones. Four rules matter most to contractors.
Same rate as last year. Agencies continue fiscal year 2026 programs at the fiscal year 2026 rate. There is no new money for growth yet.
No new starts. A project or activity that was not funded in fiscal year 2026 cannot begin under the CR. Brand-new programs wait for the full-year bill.
Extra limits for defense. The Department of Defense cannot begin production of items that were not already in production, raise production rates above fiscal year 2026 levels, or start new multiyear procurements.
Careful spending. The law directs agencies to take "only the most limited funding action" needed to continue their work. In practice, contracting officers often fund work in smaller amounts and for shorter periods until a full-year budget arrives.
The law also includes exceptions that let certain programs run above last year's rate. One applies directly to small businesses. SBA's loan programs, including 7(a) and 504 loans, can be funded at the level needed to keep up with increased demand, so that program is not held to last year's pace while the CR is in effect.
How does a CR affect your contracts?
Existing contracts and recompetes can generally continue under a CR, while new programs wait for the full-year budget.
Existing contracts. Funding can arrive in pieces. Your contracting officer may add money to your contract through several small modifications rather than one. Check the funded amount on your contract, not just the total value, and do not perform work beyond what is funded without talking to your contracting officer first.
Option years. If your contract has an option coming up before December 11, the agency can still exercise it. In some cases it may do so for a shorter period or with partial funding. Ask your contracting officer early how the option will be handled.
New awards. Recompetes and follow-on work for existing programs can usually move forward. Awards for programs that are new in fiscal year 2027 are likely to wait. Some solicitations will state that the award depends on funds becoming available. Those solicitations are still worth bidding.
Small purchases. The CR does not change the dollar limits that govern federal buying. The micro-purchase threshold stays at $15,000, and the simplified acquisition threshold stays at $350,000. Agencies still buy the supplies and services they need to keep existing programs running. When one of those purchases falls between $15,000 and $350,000, the rules require the contracting officer to set it aside for small businesses whenever two or more capable small businesses are likely to bid. That rule stays in force throughout the CR.
Delays and pricing. A delay can change what the work costs. A January 2026 GAO report on how CRs affect the Department of Defense describes a facilities contract at Joint Base San Antonio that was estimated at $579,000. The work was delayed while the base operated under a CR in fiscal year 2024. By the time a full-year budget passed, the quoted price had risen to $1,445,000. If an award you are bidding on may slip, state clearly how long your pricing is valid.
The first quarter is always the quietest. In fiscal year 2025, which also began under a CR, agencies obligated $156.7 billion in contracts from October through December. That was 20 percent of the year, compared with 37 percent in the fourth quarter. Our fiscal year-end spending analysis has the full quarter-by-quarter breakdown. Contracts keep flowing in the first quarter. They flow at a steadier pace.
What happens on December 11?
By December 11, Congress will take one of three paths:
- Pass full-year appropriations for some or all agencies. Those agencies then operate on their fiscal year 2027 budgets.
- Pass another CR that extends current funding to a later date.
- Let funding lapse, which leads to a government shutdown for any agency without funding.
Each has happened before. Fiscal year 2026 began with a lapse in funding. The shutdown that followed ran 43 days, from October 1 to November 12, 2025, the longest on record.
What should contractors do before December 11?
- List your active contracts. For each one, note the funded amount, the period of performance, and any option dates before December 11.
- Talk to your contracting officers now. Ask how upcoming options and funding modifications will be handled. A short conversation in October prevents a surprise in December.
- Keep bidding. Focus on recompetes and follow-on work, which can move forward under a CR. Prepare proposals for new programs so you are ready when full-year funding arrives.
- Keep your SAM.gov registration current. Confirm it is active and that your contact information is correct at SAM.gov. An expired registration can delay an award or a payment at any point in the year.
- Plan for December 11. Read what your contracts say about stop-work orders. Know which of your contracts are already fully funded. Have a plan for cash flow if payments slow down in December.
- Watch for small purchases. Opportunities between $15,000 and $350,000 for existing programs can keep moving during the CR, and the small business set-aside rule applies to them.
- Use the steadier pace to position. Study agency procurement forecasts, update your capability statement, and build relationships with the small business offices at your target agencies. That work pays off when spending picks up later in the year.
The bottom line
Fiscal year 2027 begins October 1 on schedule, and agencies are funded through December 11, 2026. Current contracts will continue, recompetes can move ahead, and new programs will wait for the full-year budget.
How can FEDCON help you prepare?
You do not have to work through a continuing resolution on your own. FEDCON helps businesses nationwide. If you have questions about how the CR affects your contracts or your pipeline, talk to a FEDCON advisor or call (855) 233-3266.
We will update this post when Congress acts on funding before December 11.