Continuing Resolutions Decoded: What You Can (and Can't) Obligate Right Now

It's mid-October. You're a contracting officer with a bridge contract on your desk that's ready to sign. The requirement is critical. The vendor is standing by. Legal has cleared it. Then someone from your resource management office leans into your cube and says, "We're under a CR now—are you sure you can obligate that?" Suddenly, what felt like a routine action becomes a minefield. Can you sign? Should you wait? Will this trigger an Anti-Deficiency Act violation?

This is the reality every CR season. Contracting officers are expected to keep operations moving while navigating a maze of appropriations restrictions that are rarely written in language that translates to contract execution. The problem isn't that CRs are complicated. The problem is that most guidance explains what a CR is, not what you can do under one.

This article skips the civics lesson. It assumes you know a Continuing Resolution is in effect and focuses on the only question that matters: can you legally obligate this money right now? We'll walk through the three most common CR traps, provide a practical permission checklist, and show you how to apply it to the contract actions you're actually executing.

The Core CR Constraint That Governs Every Obligation Decision

A Continuing Resolution does two things. It keeps the government funded when Congress hasn't passed a full-year appropriations bill, and it restricts how that money can be spent. The default rule is simple: you can continue last year's operations at roughly last year's spending rate, but you cannot start new programs or spend faster than you did before.

This sounds straightforward until you try to apply it to a contract. What counts as "continuing" versus "new"? What does "last year's rate" mean when you're exercising an option with a price escalation clause? How do you handle a twelve-month severable services contract when the CR might expire in six weeks?

Every obligation decision under a CR comes down to a two-part test. First: is this a continuation of existing operations, or does it represent new policy direction or scope? Second: does the proposed obligation exceed the rate established in the prior fiscal year? If you can answer both questions confidently, you can move forward. If either answer is unclear, you need to escalate before you sign.

Think of a CR like a household budget during a job transition. You can keep paying your mortgage, utilities, and car payment because those are continuing obligations. You probably shouldn't buy a boat or start a kitchen renovation. And if you suddenly start spending 30% more per month than you did last year, someone's going to ask why. The same logic applies to federal obligations.

Trap One: New Starts vs. Continuation

The single most common CR trap is misclassifying a contract action as a continuation when it's actually a new start. Under most CRs, new starts are prohibited unless explicitly authorized in the CR language. But the line between continuation and new start isn't always obvious.

A continuation means you're sustaining an activity that existed and was funded in the prior fiscal year. The requirement doesn't have to be identical, and it doesn't have to be under the same contract. What matters is whether the underlying program or capability was operational and funded before the CR took effect.

Here's how to classify the most common scenarios. Exercising an option year on an existing contract? That's almost always a continuation, assuming the base contract was awarded and funded in a prior year. Awarding a bridge contract because your incumbent contract expired? Still a continuation, as long as the requirement itself isn't new. Issuing a new task order under an IDIQ that was awarded before the CR? Continuation, assuming the type of work is consistent with prior task orders.

Now consider a brand-new contract for a brand-new program that didn't exist last year. That's a new start, and it's presumptively prohibited under a CR. What about a base award for a requirement that was funded last year but under a different contract vehicle—say, you're moving from a single-award contract to an IDIQ structure? This is a gray area. The requirement existed, which suggests continuation, but the vehicle and potentially the scope are new. You'll need agency-specific guidance or legal review.

The decision rule: if the requirement was active and funded in the prior fiscal year, you're generally safe to proceed as a continuation. If the program, capability, or scope is new, assume it's prohibited unless the CR explicitly authorizes it or your legal counsel confirms otherwise.

Trap Two: Rate-for-Operations Ceilings

Even if your action qualifies as a continuation, you're not out of the woods. The second CR constraint is the rate-for-operations rule. This means you can't obligate funds faster than you did during the equivalent period in the prior fiscal year. If you spent two million dollars on IT support services between October and December last year, you generally can't spend three million on the same requirement this year under a CR.

In practice, this gets tricky fast. Suppose you're exercising an option year with a three-percent price escalation clause. The contract was competed and awarded fairly, and the escalation is tied to an index. Is that allowed? Usually yes, because the escalation was built into the contract structure and reflects a predictable continuation. But if the increase is large or if you're bundling additional scope into the option, you could exceed the rate and trigger a problem.

Incrementally funded contracts present another challenge. If you funded a contract at 500,000 dollars in the first quarter last year, but this year you want to incrementally fund it at 750,000 dollars in the same period, that's a rate increase. You'll need to justify why the spending pattern changed or risk a compliance issue.

Task orders under cost-reimbursement IDIQs are especially vulnerable. If the prior-year burn rate for similar task orders was steady, but your new task order contemplates a significant ramp-up in labor hours or travel, that could violate the rate rule even if the overall program is a continuation.

Here are the warning signs: you're proposing to obligate significantly more in the first few months than you did last year for the same requirement. You're adding scope, even incrementally, that wasn't funded before. You're accelerating a procurement timeline in a way that concentrates spending earlier in the year. Any of these patterns should prompt a closer look.

The decision rule: compare the annualized obligation rate of your proposed action to the prior fiscal year's actual obligation rate for the same requirement. If your rate is higher, you need additional justification, explicit authorization in the CR, or confirmation from your resource management or legal office before proceeding.

Trap Three: Severable Services and Contract Period Timing

The third trap involves severable services and how contract period of performance interacts with CR timing. This is where the bona fide needs rule collides with CR restrictions, and it's one of the most misunderstood areas of CR compliance.

A severable service is one that's performed over time in discrete increments—think janitorial services, grounds maintenance, or IT help desk support. Each day or week of performance is separate from the next. Non-severable services involve a single undertaking that produces one result, like a system design study or a training course. The distinction matters because severable services are traditionally funded by the fiscal year in which the service is performed.

Under a CR, you generally cannot obligate funds for severable services that extend beyond the period covered by the CR. If you're operating under a CR that expires on November 17, you can't sign a twelve-month severable services contract on November 1. Why? Because the CR only provides budget authority through November 17. Obligating funds for performance in December, January, and beyond assumes budget authority you don't yet have.

This creates real tension in acquisition planning. Suppose you need to exercise an option year on a facilities management contract. The option period runs for twelve months starting December 1. The CR expires December 20. Can you exercise the option now? Technically, no—not unless the CR language includes a provision allowing certain categories of obligations to extend beyond the CR period, or unless your agency has issued specific guidance permitting it.

Bridge contracts add another layer. A three-month bridge for a severable service is easier to defend under a CR than a six-month bridge, because the shorter period is more likely to fall within the CR window or within a predictable appropriations timeline. But even short bridges can create problems if they're structured carelessly.

Non-severable services are treated differently. If you're awarding a contract for a single, unified deliverable—say, a cybersecurity assessment—the bona fide needs rule allows you to obligate the full amount in the fiscal year the need arises, even if performance extends into future fiscal years. But you still need to ensure the need is current and that the contract isn't a workaround to avoid CR restrictions on severable services.

The decision rule: if you're dealing with a severable service, the period of performance cannot extend beyond the current CR end date unless the CR or agency policy explicitly permits it. If you're dealing with a non-severable service tied to a single undertaking, you can generally proceed if the need is bona fide and current. When in doubt, shorten the performance period or seek clarification before award.

The CR Permission Checklist: Apply Before You Route

Here's the practical framework you can use before submitting a purchase request package, signing an award document, or executing a modification. This five-step checklist translates CR restrictions into acquisition-level decision points.

Step 1: Is this a continuation of a prior-year requirement or a new start? Look at whether the program or capability was active and funded in the prior fiscal year. If yes, it's presumptively a continuation. If no, or if the scope has expanded significantly, treat it as a new start and escalate.

Step 2: Does the proposed obligation rate exceed last year's rate for this requirement? Compare your proposed spending pattern to the prior fiscal year's actual obligations over the same period. If you're accelerating spending or increasing scope, document why and confirm it's permissible under your agency's CR guidance.

Step 3: Is this a severable service, and does the period of performance extend beyond the current CR end date? If yes, you likely cannot proceed without explicit authorization. Consider shortening the period of performance, issuing a bridge, or waiting for additional guidance.

Step 4: Does the CR language include any specific prohibitions or authorizations relevant to this action? Read the actual CR text or your agency's implementation memo. Some CRs include carve-outs for specific programs, accounts, or types of spending. Make sure your action isn't explicitly prohibited—or explicitly allowed.

Step 5: If any answer raises a red flag, escalate to legal or funding authority before proceeding. Don't guess. The Anti-Deficiency Act carries serious consequences, and CR violations can result in personal liability. If you're uncertain, route the question up and document the response in your contract file.

Document your reasoning clearly. A simple memo to file explaining how you applied the checklist and reached your conclusion is often enough. It shows you exercised due diligence and protects you if the funding situation changes or if someone questions the obligation later.

Applying the Framework to Common Acquisition Actions

Let's take the framework and apply it to the contract actions you're most likely to encounter during a CR. These scenarios show how the checklist works in practice.

Option year exercise on a fixed-price contract. The base contract was awarded two years ago. The option includes a three-percent economic price adjustment clause. You're exercising the option to maintain the same scope of work. This passes the test: it's a continuation, the rate increase is modest and contractually justified, and if it's not a severable service, the period of performance is less of a concern. Proceed, but document the decision.

Bridge contract to avoid a gap in services. Your incumbent contract expires in two weeks, and the follow-on award is delayed. You need a six-month bridge for IT support services—a severable service. The CR expires in five weeks. This fails Step 3. You cannot award a six-month bridge that obligates funds beyond the CR period. Solution: issue a bridge that covers only the CR period, or seek explicit authorization to extend beyond it.

New task order under an existing IDIQ. The IDIQ was awarded three years ago. You've issued similar task orders every year. The new task order is for software development support—same type of work, same labor categories, same rough dollar value. This is a continuation under an existing vehicle. Check the rate: if the spending pattern matches prior years, you're clear. Proceed.

Scope modification or change order on a contract awarded pre-CR. You need to add scope to an existing contract. Ask: does the modification expand the program in a way that looks like a new start? Does it increase spending above the prior-year rate? If the mod is minor and keeps spending consistent, it's likely permissible. If it's a significant expansion, treat it as a new start and escalate.

Base award of a brand-new contract under a recurring program. You're awarding a new contract for a program that's existed for years. Last year's contract ended, and you competed a replacement. This is continuation, not a new start, because the program itself is ongoing. Verify the rate and proceed.

When a proposed action doesn't pass the CR test, adjust your strategy. Shorten the performance period. Split the requirement into phases. Issue a smaller bridge while you wait for full-year appropriations. Defer the new start until the CR lifts. The goal isn't to stop all acquisition activity—it's to align your execution authority with the funding authority you actually have.

Why This Matters

Understanding continuing resolutions at the contract execution level prevents two costly failures: illegal obligations and acquisition paralysis. An Anti-Deficiency Act violation can result in administrative action, reputational damage, and in extreme cases, personal liability. But unnecessary caution is nearly as harmful. When acquisition teams freeze all activity out of fear, mission-critical requirements stall, vendors lose confidence, and programs suffer.

Contracting officers who master CR mechanics gain credibility and improve acquisition velocity during uncertain funding periods. You become the person who can explain why one action can proceed and another can't. You reduce reliance on legal review for routine decisions. You help program managers adjust their strategies in real time instead of discovering problems at signature.

This knowledge also repositions your role. You're not just a contract administrator executing transactions. You're a steward of appropriations law, ensuring that every obligation is legally supported and aligned with Congressional intent. That's a higher level of professionalism, and it's a capability that's especially valuable when funding is uncertain.

Most importantly, this framework is repeatable. Once you internalize the logic—continuation vs. new start, rate comparison, severable service timing—you can apply it to any CR scenario, regardless of how long the CR lasts or what specific language it contains. You're not memorizing rules. You're building a mental model that adapts to the situation in front of you. That's the skill that separates experienced contracting officers from those still learning the trade.