The federal fiscal year in the United States begins on October 1st and ends on September 30th. On the first Monday of February each year, the President delivers an annual budget request to Congress for the next fiscal year. This budget request is the result of at least nine months of work, with federal agencies putting together their budget proposals, the Office of Management and Budget (OMB) reviewing and sending them back to agencies, and the request assuming its final shape.

After the budget request is delivered to Congress, there is a minimum of eight months of congressional maneuvering to pass a budget resolution, schedule hearings and votes, and negotiate reconciliation between the House and Senate if there are disagreements. Sometimes, instead of individual spending bills, Congress puts together an omnibus spending bill or a “minibus” that funds the entire federal government or a handful of agencies at a time.

The important action that takes place after the budget request is in the House and Senate appropriations committees, which control agency spending. These committees consist of subcommittees with jurisdiction over various parts of the government. Subcommittee chairs hold a significant amount of power.

There are three broad categories of federal government expenditures: discretionary, mandatory, and interest payments. The budget process focuses mainly on discretionary spending, which funds everything from small agencies to the Department of Defense. Mandatory spending is allocated to programs such as Social Security, Medicare, and Medicaid. Most information technology spending falls under discretionary funding, but there are opportunities for contractors in mandatory spending as well.

Authorization laws are typically good for a few years and permit appropriations up to a certain level for agencies or programs. Most federal agencies are funded entirely with discretionary funding, which requires the passing of an appropriations bill by Congress. However, Congress often allows authorization laws to expire while still appropriating money for those programs.

The budget process takes a long time, and government budget planners often deal with three fiscal years at once. Agencies start putting together their budget requests in the spring before the budget is sent to Congress. Major systems requests require review by an investment review board and business cases for OMB review.

The Exhibits 53 are a list of all IT efforts agencies plan to undertake in the coming fiscal year. However, these lists are often vague and subject to change. Congress does not pay much attention to the Exhibits 53 and often appropriates funds for IT projects through larger-purpose line item requests.

The federal government often operates under a continuing resolution (CR) when spending bills are not approved on time. CRs allow agencies to continue spending at the rate of the previous year’s levels. The fourth quarter of the fiscal year is often a busy time for agencies as they try to spend their budgets before they expire.

The Antideficiency Act ensures that federal employees do not spend more money than has been appropriated. Violations of this act can result in criminal charges, although no civil servant has ever been convicted. The act prohibits federal employees from authorizing an obligation in excess of the amount appropriated, signing contracts before money has been appropriated, or accepting voluntary services except in cases of emergency.

Overall, understanding the federal budget process and the timing of the fiscal year is important for businesses interested in federal contracting. It is crucial to pay attention to budget requests, appropriations, and the timing of spending in order to take advantage of opportunities in the federal market.

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