The federal government began fiscal year 2027 under a continuing resolution. For government contractors, the first thing to understand is what the law actually says, because much of what gets shared online treats a CR like a shutdown. It is not one.
What the law says
H.R. 6500, the Continuing Appropriations and Extensions Act, 2027, was signed into law as Public Law 119-103 on September 2, 2026. Division A of the act, the Continuing Appropriations Act, 2027, provides continuing appropriations for fiscal year 2027. A few provisions matter most for contractors:
- Section 101 provides funding at the rate for operations in the applicable fiscal year 2026 appropriations acts.
- Section 104 generally prohibits using these funds to initiate or resume a project or activity for which appropriations were not available during fiscal year 2026, except as the act otherwise provides.
- Section 106 makes the funding available until the earlier of an applicable appropriation being enacted or December 11, 2026.
- Section 110 directs that the act be implemented so that only the most limited funding action permitted is taken.
Put simply, the CR generally continues eligible FY2026 projects and activities at FY2026 rates and restricts new starts, subject to specific exceptions in the law. The full text is available on GovInfo: https://www.govinfo.gov/content/pkg/PLAW-119publ103/html/PLAW-119publ103.htm
What a continuing resolution means for government contractors
Existing funded work generally continues. The effect contractors are more likely to feel is on timing. CR funding constraints can lead agencies to delay some awards, use shorter funding periods, adjust acquisition timing, or take other limited funding actions, depending on the agency, the appropriation, the contract, and the funds available. Some contractors will see no change at all. Others may wait longer for a new award, an option exercise, or a modification.
No one can tell you today exactly how your contract will be affected, and it is not worth building a plan around a prediction about Congress. What you can do is understand how much your business depends on timing that may move.
What to do this month
Start by listing any award, option, modification, or funding action you are expecting between now and the end of the year. Next to each one, write down what you are spending or planning to spend in anticipation of it, including hiring, subcontractor commitments, and materials. Then look at how long the business could carry those costs if that item arrived 30 or 60 days later than expected.
That exercise is the foundation for the rest of October. Next week we will walk through building a 13-week cash forecast, and later in the month we will cover invoice issues you can control and how to plan for a timing slip before it happens.
Is a continuing resolution the same as a shutdown?
No. A continuing resolution provides funding, which is what keeps agencies operating. A funding gap is the situation where appropriations have not been enacted and funding is not available. Under the CR, eligible FY2026 activities generally continue at FY2026 rates and new starts are generally restricted, subject to exceptions in the law. The planning question for contractors is about timing, not about whether work stops.
Update policy: If FY2027 appropriations status changes after publication, this post will carry a dated update at the top. This article is general education and not legal or individualized financial advice.
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