Government Shutdown: Operations of the
Department of Defense During a Lapse in
Appropriations
Pat Towell
Specialist in U.S. Defense Policy and Budget
Amy Belasco
Specialist in U.S. Defense Policy and Budget
September 26, 2013
Congressional Research Service
7-5700
www.crs.gov
R41745
Government Shutdown: Operations of DOD During a Lapse in Appropriations
Summary
Through most of the second half of FY2013, funding for the Department of Defense (DOD), as
for most other federal agencies, has been provided by the Consolidated and Further Continuing
Appropriations Act, 2013, (P.L. 113-6), which will expire at 11:59 p.m. on Monday, September
30. If additional funding is not provided by then, DOD, like other agencies, will be subject to a
lapse in appropriations during which agencies are generally required to shut down. In the past,
however, the Office of Management and Budget (OMB) has identified a number of exceptions to
the requirement that agencies cease operations, including a blanket exception for activities that
“provide for the national security.” If the Administration approves of such exceptions in the
current circumstances, many Department of Defense activities would continue, though other
activities would halt.
As a result, during a lapse in appropriations, some DOD personnel would be “excepted” from
furloughs, including all uniformed military personnel, while others would be furloughed and,
thus, not be permitted to work. Even “excepted” military and civilian personnel who would
continue to work and whose pay is normally provided through annual appropriations would not
be paid, however, until after appropriations are subsequently provided for that purpose. Personnel
who are not “excepted” would not be entitled to receive pay for the period during which they
were furloughed although, in the past, Congress has provided for them to receive the pay they
would have received if they had not been furloughed.
A frequent question is how federal employees’ compensation was affected during the last
government shutdown in 1995-1996. There were two shutdowns at that time, one of five days,
from November 13 through November 19, 1995, and one of 21 days, from December 15, 1995,
through January 5, 1996. The first shutdown was not long enough to affect pay checks, and DOD
was not affected by the second because defense appropriations were enacted on December 1, so
funding was available. Moreover, by law, Congress provided back pay for employees who had
been furloughed during the two shutdowns, although the government was not legally obligated to
provide that pay.
The authority to continue some activities during a lapse in appropriations is governed by the
Antideficiency Act, now codified at 31 U.S.C. 1341 and 1342, as interpreted by Department of
Justice (DOJ) legal opinions and reflected in Office of Management and Budget (OMB) guidance
to executive agencies. Subject to review by OMB, each agency is responsible for making specific
determinations on which activities may continue during a shutdown and which may not. Legally,
according to DOJ and OMB guidance, activities that may continue during a lapse in
appropriations include (1) activities “necessary to bring about the orderly termination of an
agency’s functions;” (2) administration of benefit payments provided through funds that remain
available in the absence of new appropriations, including, in the case of DOD, military retirement
benefits; (3) activities and purchases financed with prior year funds and ongoing activities for
which funding has already been obligated; (4) activities undertaken on the basis of constitutional
authorities of the President; and (5) activities related to “emergencies involving the safety of
human life or the protection of property.” The Defense Department attributes its authority to carry
on national security-related operations mainly to Section 1342 of the Antideficiency Act, which
permits the continuation of activities to protect human life and property.
Current DOD guidance on operations in the event of a shutdown is not available. Guidance issued
in April 2011, when a funding lapse was widely viewed as a real possibility, provided that
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Government Shutdown: Operations of DOD During a Lapse in Appropriations
ongoing military operations, such as those in Afghanistan (and, at that time, in Iraq), could
continue, along with training of forces that are assigned to potential future operations and a broad
range of activities that, in DOD’s view, were needed to support national security-related
operations. In the past, these have included operation of DOD Dependent Schools and child care
centers. DOD medical activities may also continue, including TRICARE services for dependents,
though non-essential services such as elective surgery may not be provided in military medical
facilities.
The 2011 DOD memo also pointed out that—as noted, above—the pay of military and civilian
personnel could be interrupted, however, potentially imposing hardships on many families.
Payments to vendors derived from multiyear appropriations could continue, but payments from
current appropriations would not be permitted, which might result in some confusion and,
potentially, disruptions to supplies of some material and services.
Another potential facet of DOD’s preparation for a potential funding lapse is outlined in a1998
Army memo giving general guidance for such situations. It directs commanders to educate their
personnel regarding the potential effect on their personal financial situations if pay and benefit
payments are suspended during a funding lapse. The Army memo also directs commanders to
work with creditors and support agencies in the local community to minimize the disruption to
Army personnel.
In setting its current policy for dealing with a shutdown, DOD is not bound either by its own 2011
guidance memo or by the 1998 Army guidance memo. However, those documents illustrate the
factors involved in DOD’s interpretation of applicable laws and regulations.
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Government Shutdown: Operations of DOD During a Lapse in Appropriations
Contents
Introduction ...................................................................................................................................... 1
Recent Developments ................................................................................................................ 1
Questions about DOD Operations During a Lapse in Funding ....................................................... 2
Authorities and Conditions Affecting DOD Operations in the Absence of Appropriations ............ 5
The Antideficiency Act .................................................................................................................... 7
OMB and Justice Department Guidance on DOD Activities Permitted During a Lapse in
Appropriations .............................................................................................................................. 8
2011 DOD Guidance on Operations During a Lapse of Appropriations ....................................... 11
Examples of “Exempt” and “Non-Exempt” Activities (2011 DOD memo)...................... 12
Examples of “Exempt” and “Non-Exempt” Activities from 1998 Army Memo ........................... 18
Assessing the Effects of a Government Shutdown on Defense ..................................................... 23
Effects on Military Operations ................................................................................................ 23
Effects on Military and Civilian Personnel ............................................................................. 24
Effects of Limits on Expenditures on Contracting .................................................................. 24
Contacts
Author Contact Information........................................................................................................... 25
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Government Shutdown: Operations of DOD During a Lapse in Appropriations
Introduction
Through most of the second half of FY2013, funding for the Department of Defense (DOD), as
for most other federal agencies, has been provided by the Consolidated and Further Continuing
Appropriations Act, 2013, (P.L. 113-6), which will expire at 11:59 p.m. on Monday, September
30. If additional funding is not provided by then, DOD, like other agencies, will be subject to a
lapse in appropriations.1 In that event, agencies are generally required to shut down, although the
Office of Management and Budget (OMB) has identified a number of exceptions to that rule,
including a blanket exception for activities that “provide for the national security.”2 Other than
continuing to perform such “excepted” activities, agencies are generally required to terminate
operations and personnel who are not performing “excepted” activities will be furloughed after
working only long enough to ensure an orderly shutdown.3
Recent Developments
In a September 23, 2013, memorandum to all DOD employees, Deputy Secretary of Defense
Ashton B. Carter said the department was preparing for the possibility of a funding lapse by
updating its plans for executing an orderly shutdown of its non-excepted activities, in that case:
A lapse would mean that a number of government activities would cease due to a lack of
appropriated funding. While military personnel would continue in a normal duty status, a
large number of our civilian employees would be temporarily furloughed. To prepare for this
possibility, we are updating our contingency plans for executing an orderly shutdown of
activities that would be affected by a lapse in appropriations.4
Dr. Carter’s memo disclosed no detailed information about DOD’s current shutdown plans.
Appended to the memo was a brochure, published in 2011 by the Office of Personnel
Management (OPM), providing guidance to federal employees in the event of a shutdown
furlough.5
1 Military operations of the Department of Defense are normally funded through annual appropriations provided in the
department of defense appropriations act and in the military construction, veterans affairs, and related agencies
appropriations act. DOD also administers a number of civil affairs activities that are funded in other appropriations
bills, including civil construction projects managed by the Army Corps of Engineers. The non-military functions of the
Department of Defense are not addressed in this memo.
2 The exception for national security was cited in OMB memos in 1980 and 1981 that are discussed below. Those
memos, in turn, have been referenced by OMB guidance to agencies in years since then. OMB Circular A-11, which is
periodically updated, also requires agencies to maintain plans for the orderly termination of operations in the event of a
lapse in appropriations, with exceptions for personnel engaged in military, law enforcement, or direct provision of
health care activities.
3 For a general discussion of government shutdowns because of funding lapses, see CRS Report RL34680, Shutdown of
the Federal Government: Causes, Processes, and Effects, coordinated by Clinton T. Brass.
4 The Carter memo is available at http://www.defense.gov/documents/DSD%20Guidance-Potential%20Shutdown-
23SEP13-Signed.pdf.
5 The OPM attachment to the Carter memo was the 2011 version of the shutdown furlough brochure. The September
2013 version of the brochure is available at, OPM http://www.opm.gov/policy-data-oversight/pay-leave/furlough-
guidance/guidance-for-shutdown-furloughs.pdf.
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Government Shutdown: Operations of DOD During a Lapse in Appropriations
Questions about DOD Operations During a Lapse
in Funding
If the Administration follows past practice in defining exceptions to the requirement for agencies
to shut down in the absence of appropriations, many DOD activities would continue during the
period of a funding lapse, though other activities would halt. Some personnel would be
“excepted” from furloughs, including all uniformed military personnel on active duty, while
others would be subject to furlough. Even excepted military and civilian personnel who would
continue to work during a lapse in appropriations and whose pay is normally provided through
annual appropriations would not be paid, however, until after appropriations are subsequently
provided for that purpose.
Although these basic principles are clear enough, their application in practice leaves room for a
considerable degree of uncertainty. As a means of helping to address such uncertainty—in the
absence of any publicly announced declaration of current policy—this report provides an
overview of guidelines that, over the past 30 years, have governed planning for DOD operations
in the event of a funding lapse, and it discusses their implications for a possible, impending
shutdown. It also briefly reviews DOD guidance issued in 2011 and Department of the Army
guidance issued in 1998 covering operations during a lapse in appropriations.
Among the questions the report address are whether uniformed military personnel would receive
full pay in the event of a shutdown, and, if not, why military personnel were paid during the two
most recent shutdowns in 1995 and 1996; whether DOD Dependent Schools would continue to
operate during a shutdown; how a shutdown would affect operations of the Defense Finance and
Accounting Service; and whether the “Feed and Forage Act,” 41 U.S.C. 11, which allows the
Defense Department to obligate funds in advance of appropriations for certain purposes, might be
invoked to provide additional flexibility during a funding lapse. Answers to some questions such
as these are quite simple, to others complex, and to others uncertain.
Assuming that past Attorney General and OMB guidance will be followed in the event of an
impending shutdown, brief answers to these questions are as follows:
• Pay of uniformed military personnel: Even though most or all uniformed
personnel would likely be excepted from furloughs during a lapse in funding, as
they have been in the past, no special provision allows the Defense Department
to issue pay checks to them when appropriated funds are not available to do so.
In this regard, uniformed personnel are treated no differently than excepted
federal civilian employees who are similarly required to continue working during
a shutdown but whose pay will be delayed until appropriations are enacted. If,
therefore, current funding lapses on September 30, 2013, and appropriations are
approved on October 10, military personnel would receive their full pay for the
period October 1-15 on October 15, their next scheduled pay date. Otherwise,
they would receive no pay on October 15. During the most recent government
shutdowns at the end of 1995 and in early 1996, uniformed personnel were paid,
as usual. But that is because the FY1996 defense appropriations act became law
on December 1, 1995, so appropriations were available. At the time, there were
two periods of funding lapses, the first of five days from Monday, November 13,
through Saturday, November 19, 1995, and the second of 21 days, from Friday,
December 15, 1995, through Friday, January 5, 1996. DOD was not affected by
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the second, longer shutdown, and the first did not last long enough to have an
effect on pay checks. If the defense appropriations bill had not been enacted
before the second shutdown, however, military personnel would not have
received a full pay check, as scheduled, on December 29, 1995.
• Operation of DOD Dependent Schools: According to quite detailed guidance
prepared by the Army in 1998 (following the development of agency plans to
implement a government shutdown in 1995 and 1996), the support that
dependent schools provide to military personnel is directly enough related to
national security that the schools may continue to operate during a shutdown.6 If
that precedent is followed today, dependent schools would continue to operate.
That outcome is not certain, however, since past precedents may be superseded
by guidance that DOD is currently preparing. The 1998 Army guidance also
concludes that child care may continue. It does not directly address policy on
other family services, however, or on many other details of a shutdown. Army
guidance gives base commanders considerable discretion in implementing policy,
so there may be significant differences in the impact of a shutdown from one
base to another.
• Operation of the Defense Finance and Accounting Service: Some DFAS
operations would be likely to continue through the whole period of a funding
lapse, others only long enough to terminate operations in an orderly way, and yet
others might continue for a time, stop, and then restart later. Presumably, DFAS
personnel needed to administer military retired pay and other retiree benefits
would be expected to work during a funding lapse because the authority to
distribute benefits drawn from multi-year funds, including retirement funds, is
implied by the responsibility agencies have to provide payments to which
recipients are entitled.7 Military pensions and other retirement benefits are
entitlements financed through the military retirement and health care fund, which
is available independently of annual defense appropriations.
In addition, under past precedents, DFAS personnel who handle regular payrolls
may be expected to work long enough following the beginning of a shutdown to
issue pay checks for amounts earned when appropriations were still available and
to prepare to issue full pay if appropriations are provided in time to do so.8 In
general, though, activities to implement a shutdown would not last long—OMB
guidance reflects an assumption that most termination activities will take only a
few hours rather than several days.9
6 Office of the Assistant Secretary of the Army (Financial Management and Comptroller), “Continuing Resolution
Authority General Guidance,” August 24, 1998, p. 17, on line at http://handle.dtic.mil/100.2/ADA351724.
7 In reviewing the applicable law in 1980 and 1981, the Attorney General concluded that agencies are “authorized by
law” to incur obligations in advance of appropriations “for the administration of benefit payments under entitlement
programs when the funds for the benefit payments themselves are not subject to a one-year appropriation.” This
reasoning is the basis on which Social Security Administration personnel are authorized to continue to process Social
Security checks even when appropriated funds for the agency lapse. See Opinion by Attorney General Benjamin
Civiletti, January 16, 1981.
8 Army guidance cited above notes that DFAS will delay the distribution of pay as long as possible during a shutdown
in order to provide full pay if appropriations are enacted, which implies that some DFAS payroll personnel, at least,
will continue to work.
9 See, for example, Richard G. Darman, “Memorandum for Heads of Executive Departments and Agencies,” OMB
Memorandum M-91-02, October 5, 1990: “Shutdown: If no CR is likely to be enacted on Tuesday, we will issue
(continued...)
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Under past precedents, other DFAS operations might continue to the extent they
are required to manage operations financed with unobligated balances of funds
provided in prior fiscal years. Though new appropriations are not available
during a funding lapse, a substantial amount of money provided to the Defense
Department is available for obligation for more than one year, including funding
for R&D, procurement, military construction, and purchases of material for
inventories of stock funds. Army shutdown guidance in the past, which is
discussed at length later in this report, provides that “Prior year funds may be
obligated without restriction,” which implies that program administration,
contract oversight, and auditing functions, some of which are carried out by
DFAS, may also continue. To the extent pay of personnel is provided with prior
year funds, expenditures are allowed, so some personnel may be eligible to
continue receiving pay checks.
Additional DFAS operations might also continue to the extent they are
determined to be needed to support ongoing DOD national security-related
operations. Exactly how that would affect DFAS personnel, though, depends on a
number of factors. Many DFAS personnel are paid through reimbursements from
other appropriated accounts for services that DFAS provides to organizations
within DOD. Again under past precedents, to the extent DFAS services are
needed by DOD organizations whose national security-related operations will
continue, those funds might continue to be available, as usual, to reimburse
DFAS.10 It is quite possible that demand for DFAS services would decline
initially as operations are curtailed and then resume later. In any case, even if
funds are formally transferred to DFAS, and some DFAS personnel are therefore
excepted from furloughs, in the absence of appropriations, it does not appear that
funds would be available to issue pay checks to them.
• Authority to Obligate Funds Under the “Feed and Forage Act”: The Feed
and Forage Act, 41 U.S.C. 11, says, in part:
No contract or purchase on behalf of the United States shall be made, unless the same is
authorized by law or is under an appropriation adequate to its fulfillment, except in the
Department of Defense and ... the Coast Guard when it is not operating as a service in
the Navy for clothing, subsistence, forage, fuel, quarters, transportation, or medical and
hospital supplies.
During the Vietnam War, the law was used to provide funds when supplemental
appropriations were delayed. In more recent years, it has been used mainly to
provide short-term funding for unplanned military operations. If invoked during a
funding lapse, the act would give DOD authority to obligate funds in advance of
appropriations for the limited number of purposes specified. Use of the Feed and
Forage Act during a funding lapse appears unnecessary, however, and it has never
been invoked for that purpose. During earlier shutdowns, Attorney General and
(...continued)
instructions initiating a phase-down of activities for non-excepted employees. Such phase-down activities for non-
excepted personnel, if called for, should be completed during the first three hours of the workday.” (Italics in original.)
10 According to Army guidance cited later in this report, during a lapse in appropriations, “Funded and automatic
reimbursable orders may be accepted consistent with receipt of current year funded reimbursable authority” – i.e.,
reimbursable activities may continue to the extent funds are available to provide the reimbursements.
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OMB guidance has allowed national security-related operations to continue. The
authority for DOD to continue national security-related activities appears to be
considerably broader than that provided by the Feed and Forage Act, which is
limited in purpose and which does not directly provide authority to obligate funds
for pay of military personnel.11 Moreover, like the authority provided by the
Antideficiency Act, the Feed and Forage Act permits only the obligation of funds
and not disbursements until funds are subsequently appropriated—neither law
allows the Defense Department to issue pay checks or to make other payments.12
While invocation of the Feed and Forage Act during a shutdown is conceivable, it
is not clear what purpose it would serve.13
Authorities and Conditions Affecting DOD
Operations in the Absence of Appropriations
On the assumption that government operations in the event of a funding lapse will continue to be
governed by guidance that has been followed over the past 30 years, the Department of Defense
may continue, in the absence of appropriations, to carry on a quite broad range of activities. The
most far-reaching authority that affects DOD is authority to continue activities that “provide for
the national security.” Even DOD’s authority to provide for national security, however, may be
constrained by legal limits on the financial procedures that are permitted when appropriations
lapse. Among other things, in order to carry on activities that are permitted to continue, but for
which appropriations have lapsed, funds may be obligated in advance of appropriations (i.e.,
legally binding contractual commitments may be made), but expenditures of funds that derive
from such obligations (i.e., the payment of bills with checks or electronic remittances) are
prohibited. As a result, though uniformed military personnel and many DOD civilian employees
may be expected to continue in their duties during a funding lapse, those normally paid with
current-year appropriated funds, including virtually all uniformed personnel and most civilians,
will not receive pay until after appropriations become available. Nor will payments to vendors for
goods and services be permitted if the payments derive from contracts entered into in advance of
appropriations.
The legal authority under which the Department of Defense may continue operations in the event
of a funding lapse is established by the Antideficiency Act, now codified at 31 U.S.C. 1341 and
1342. The legal interpretation of the conditions under which operations may continue has been
established, in turn, by Department of Justice legal opinions and Office of Management and
11 The Feed and Forage Act does not itself permit pay of personnel, but a different statute provides one exception.
Section 2201(c) of Title 10 U.S. Code allows funding for an increase in the number of active duty troops to be
incorporated into the list of activities that may be funded under 41 U.S.C. 11 – i.e., it indirectly expands the purposes
for which funding under the Feed and Forage Act may be available. The provision applies only to funding for an
increase in the number of active duty personnel, however, not to funding of current personnel levels.
12 See U.S. Department of Defense, Office of the Under Secretary of Defense (Comptroller), “Budget Execution:
Processes and Flexibility,” March 2009, p. 17, http://comptroller.defense.gov/execution/
Budget_Execution_Tutorial.pdf, which says, with regard to the Feed and Forage Act: “These authorities require
congressional notification and do not permit actual expenditures until Congress provides an appropriation of the
requested funds.” The tutorial also notes that the authority to fund an increase in personnel under 10 U.S.C. 2210 “is of
limited value since it provides only for obligations and not for expenditures (payments to members).”
13 The 2011 DOD guidance and 1998 Army shutdown guidance discussed in this mention the Feed and Forage Act as a
potential source of authority, but neither discusses the circumstances under which it might be invoked.
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Budget directives issued initially in 1980 and 1981, and that OMB has referred to in providing
guidance on shutdowns since then. Agencies, including DOD, have also been required to prepare
detailed plans for implementing a shutdown when lapses in appropriations were anticipated.
Key Department of Justice and OMB Guidance on
Operations During a Lapse in Appropriations14
•
An opinion by Attorney General Benjamin Civiletti on April 25, 1980, that found few
exceptions to Antideficiency Act limits on funding in the absence of appropriations;
•
A memorandum by OMB Director James McIntyre on August 28, 1980, that required
agencies to submit plans for operations in the event of a lapse in appropriations;
•
A memorandum by OMB Director James McIntyre on September 30, 1980, that
provided guidance to agencies on operations permitted to continue during a lapse in
appropriations;
•
An extensive opinion by Attorney General Civiletti on January 16, 1981, reviewing in
detail the legal basis for the guidance that OMB provided on September 30, 1980;
•
A memorandum by OMB Director Richard Darman on November 17, 1981, that
repeated the guidance provided by the September 30, 1980, OMB memorandum and
that added some further guidance, including the point that obligations of funds may be
permitted in advance of appropriations, but not expenditures;
•
A memorandum by Assistant Attorney General Walter Dellinger on August 16, 1995,
addressed to OMB Director Alice Rivlin, that found that a 1990 amendment to the
Antideficiency Act provided no basis for altering earlier guidance on agency operations
in the event of a lapse in appropriations;
•
A memorandum to the heads of executive departments and agencies by OMB Director
Rivlin on August 22, 1995, that conveyed the Dellinger memorandum and that required
agencies to maintain contingency plans for a lapse in appropriations based on the
September 30, 1980, and November 17, 1981, OMB memoranda.
•
A memorandum for the heads of executive departments and agencies by OMB Director
Lew on April 7, 2011 providing further guidance on contracting, grand administration,
and payments processing during a lapse in appropriations;
•
A memorandum for the heads of executive departments and agencies by OMB Director
Burwel on September 17, 2013, providing further guidance on contracting, grand
administration, and payments processing during a lapse in appropriations;
14 The April 25, 1980 and January 16, 1981 Civiletti opinions and the September 30, 1980 OMB memorandum are
available as appendices in U.S. General Accounting Office, Funding Gaps Jeopardize Federal Government
Operations, GAO Report PAD-81-31, March 3, 1981, on line at http://archive.gao.gov/f0102/114835.pdf. The other
memoranda cited. except for the 2011 and 2013 OMB memos, are available on line as appendices to Office of
Personnel Management, “Guidance and Information on Furloughs,” on line at http://www.opm.gov/furlough/
furlough.asp. The 2011 OMB memo is available at http://www.whitehouse.gov/sites/default/files/omb/memoranda/
2011/m11-13.pdf., while the 2013 OMB memo is available at http://www.whitehouse.gov/sites/default/files/omb/
memoranda/2013/m-13-22.pdf.
Hereafter in this report, these opinions and memoranda are cited by author or agency and date. Other Department of
Justice opinions related to operations in advance of appropriations have been issued as well.
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Ultimately, federal agency plans, based on OMB guidance, determine which activities will
continue in the event of a shutdown and which will not. Current agency plans have not generally
been circulated publicly. However, some insight into DOD planning may be drawn from the
guidance memorandum on operation during a funding lapse that the department issued in 2011.15
By the same token, a 1998 memo by the Army’s Comptroller on management under a continuing
resolution includes an relatively extensive list of activities that would be “exempt” from a
shutdown and activities considered “non-exempt” in the event of a funding lapse.16 DOD
operations in the event of a shutdown would also be governed by financial management
procedures that would, in turn, affect how a shutdown is managed
The following discussion, (1) briefly reviews the legal basis for the Department of Defense to
continue operations during a funding lapse and the attendant legal constraints on the scope of
activities and the financial mechanisms that are permitted, (2) provides selected excerpts from
DOD and Army guidance on activities that may continue during a funding lapse and those that
may not, and (3) provides a brief overview of the possible impact of a lapse in funding on
military and civilian personnel, on current military operations including operations in
Afghanistan, and on day-to-day business operations of the Department of Defense.
The Antideficiency Act
The Antideficiency Act, now codified at 31 U.S.C. 1341 and 1342,17 generally prohibits the
obligation or expenditure of funds exceeding amounts appropriated. It provides two quite broad
exceptions, however:
• Section 1341 says that an employee of the United States Government may not
“involve [the] government in a contract or obligation for the payment of money
before an appropriation is made unless authorized by law.” Subsequent Attorney
15 The 2011 DOD contingency plan for a funding lapse is available at http://www.defense.gov/news/
OSD_20111215govtshutdown.pdf
16 Office of the Assistant Secretary of the Army (Financial Management and Comptroller), Continuing Resolution
Authority General Guidance, August 24, 1998, on line at http://handle.dtic.mil/100.2/ADA351724. Hereinafter, the
document is referred to as “Army Continuing Resolution Guidance, August, 1998.”
17 These provisions were formerly Sections 655(a) and 655(b) of Title 31, and were renumbered without substantive
change in a recodification of Title 31 by P.L. 97-258, enacted on September 13, 1982. Attorney General opinions in
1980 and 1981 discussed in this memo refer to the earlier numbering. Section 1342 was also amended by P.L. 101-508,
November 5, 1990. The current version of the Antideficiency Act reads, in part, as follows:
§ 1341. Limitations on expending and obligating amounts
(a)
(1) An officer or employee of the United States Government or of the District of Columbia government may not—
(A) make or authorize an expenditure or obligation exceeding an amount available in an appropriation or fund …
(B) involve either government in a contract or obligation for the payment of money before an appropriation is made
unless authorized by law; ….
§ 1342. Limitation on voluntary services
An officer or employee of the United States Government or of the District of Columbia government may not accept
voluntary services for either government or employ personal services exceeding that authorized by law except for
emergencies involving the safety of human life or the protection of property.
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General opinions on operations permitted during a lapse in appropriations have
been intended, in part, to identify what obligations in advance of appropriations
should be considered to be “authorized by law.”
• Section 1342 says, in part, that “An officer or employee of the United States
Government may not accept voluntary services … or employ personal services
exceeding that authorized by law except for emergencies involving the safety of
human life or the protection of property.” One basis for Department of Defense
operations to continue during a funding lapse is this authority to employ
personnel to protect human life and property. Department of Justice opinions
have found that the authority to employ personal services implies the authority to
procure material that personnel may need to carry out their emergency
responsibilities (see below for a discussion). OMB guidance to agencies on
preparations for a shutdown has identified a quite extensive range of activities
that are permitted to continue in the absence of appropriations in order to protect
human life and property.
One other aspect of the Antideficiency Act is particularly important to consider in assessing the
effect of a lapse in appropriations on government operations. The Antideficiency Act permits
certain exceptions to the requirement that agency operations cease when appropriations are not
provided. But, the exceptions permit only the obligation of funds in advance of appropriations for
the excepted activities, not the expenditure of funds. Contracts for material and services may be
signed, and personnel may continue to be employed, but the Antideficiency Act does not permit
agencies to make payments to vendors or issue pay checks to personnel if the payments would
have to be drawn from amounts obligated in advance of appropriations. To be absolutely clear, no
money is actually available, but only the promise to provide funds at some time in the future.
OMB and Justice Department Guidance on DOD
Activities Permitted During a Lapse in
Appropriations
Attorney General opinions released in April 1980 and January 1981 and OMB memoranda issued
in September 1980 and November 1981—and referred to repeatedly in later years—provide the
basic guidance on activities that DOD and other executive branch agencies may be allowed to
continue when appropriations are not provided. In general, these activities are understood to be
“authorized by law” under Section 1341 of the Antideficiency Act or to permit the employment of
personal services for emergencies involving the safety of human life or the protection of property
under Section 1342. The principal activities that the Justice Department and OMB have
determined may continue include the following.
• Activities “necessary to bring about the orderly termination of an agency’s
functions”: The Attorney General found that agencies may obligate funds to shut
down operations after a funding lapse under the terms of the Antideficiency Act
itself, since “it would be impossible in fact for agency heads to terminate all
agency functions without incurring any obligations whatsoever in advance of
appropriations.” In general, such activities are expected to be very limited—
OMB guidance in 1995 said that “phase-down activities for non-excepted
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personnel, if called for, should be completed during the first three hours of the
workday” following the expiration of funding.
• Administration of benefit payments provided through funds that remain
available in the absence of new appropriations: The Attorney General found
that departments are “authorized to incur obligations in advance of appropriations
for the administration of benefit payments under entitlement programs when the
funds for the payments themselves are not subject to a one-year appropriation.”
This follows, he said, from the premise that funding is “authorized by necessary
implication from the specific terms of duties that have been imposed on, or
authorities that have been invested in, the agency.” The Social Security
Administration, by this reasoning, may continue to pay personnel and to fund
operations needed to manage pensions during a lapse in funding because of its
responsibility to distribute benefits that are provided through a permanent trust
fund that is not affected by a lapse in appropriations. Presumably, DOD
administration of military retired pay and medical benefits may continue as well.
• Activities and purchases financed with prior year funds and ongoing
activities for which funding has already been obligated: Substantial amounts
of DOD funding are provided in accounts that are available for obligation for
more than a year—R&D funding is typically available for two years, most
procurement for three years, and shipbuilding funds for five years. Contract
authority to procure material for stockpiles is also available as “no year” money.
Contract authority provided under standing law and unobligated balances in the
acquisition accounts remain available during a lapse in funding because they
have previously been provided—only current-year funding is affected by a lapse
in appropriations. Similarly, contracts which have already been signed, and
which may require delivery of services or material as ordered, remain valid.18
Most significantly, obligations already made or new obligations made from funds
appropriated in prior years may lead to expenditures of funds, in contrast to
obligations made in advance of appropriations. Whether vendors may be paid
during the period of a funding lapse, therefore, depends on which pot of money
the funds are drawn from—some contractors may be paid as usual while others
may not be. At the very least, a degree of confusion is likely. A further
complicating factor is whether administrative personnel needed to manage
contracts are permitted to continue working. To the extent that acquisition
personnel are paid with annual appropriations—which is generally the case—
personnel may be available to manage contracts only if they are excepted from a
shutdown. It is not necessarily to be assumed that agencies have authority under
the Antideficiency Act to except from furloughs personnel needed to administer
the use of funds available from prior year appropriations or other sources. Both
Army guidance in 1998 and recent draft DOD guidance, however, say that
18 There has been some discussion of the possibility that the military services could obligate funds for civilian pay for at
least a month or so in advance, which would allow personnel to continue working and for pay checks to be issued for
some time after a funding lapse. Such a prospect is at odds with longstanding procedures which require agencies to halt
operations in the event of a funding lapse and for non-excepted personnel to be furloughed. Continuing resolution
language stipulates that “only the most limited funding action of that permitted … shall be taken in order to provide for
continuation of projects and activities” (P.L. 111-242, Section 110), which would appear to limit such advance
obligations.
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personnel may continue to administer activities financed with prior year or other
available funds.
• Activities undertaken on the basis of constitutional authorities of the
President: The Attorney General found that the President has an inherent
constitutional authority to obligate funds in advance of appropriations to carry
out “not only functions that are authorized by statute, but functions authorized by
the Constitution as well.” When the Constitution grants a specific power to the
President, the Attorney General reasoned, “Manifestly, Congress could not
deprive the President of this power by purporting to deny him the minimum
obligational authority sufficient to carry this power into effect.” This does not
mean that the President can “legislate his own obligational authorities.” But in
the opinion of the Attorney General, “the policy objective of the Antideficiency
Act … should not alone be regarded as dispositive of the question of authority.”
The Attorney General did not specifically address whether this provides a basis
for the President to direct that funds be obligated in advance of appropriations for
reasons of national security. OMB memoranda since 1980 repeat the conclusion
that funding may be continued to “Provide for the national security, including the
conduct of foreign relations essential to the national security or the safety of life
or property.” This wording might be read to imply that the authority of agencies
to continue operations related to national security is independent of the authority
to continue activities related to the safety of life or the protection of property.
National security-related activities may, then, be among those for which
obligations in advance of appropriations are considered to be “authorized by law”
under Section 1341 of the Antideficiency Act and are permitted independently of
Section 1342 and whether or not they protect life or property. For its part,
however, the Defense Department has generally not cited any authority beyond
that provided in Section 1342.
• Activities that protect life and property: OMB guidance periodically issued in
preparation for a shutdown concludes that agencies have the authority to
“Conduct essential activities to the extent that they protect life and property.”19
The guidance reflects Section 1342 of the Antideficiency Act. Section 1342,
however, directly permits the obligation of funds only for employment of
“personal services” and not for other purposes. Rather than accept such a limited
view of what is permitted, the January 16, 1981, Attorney General opinion
provided a basis for expanding the scope of activities permitted under Section
1342 to include the acquisition of material needed to respond to emergencies:
in emergency circumstances in which a government agency may employ personal
services … it may also … incur obligations in advance of appropriations for material to
enable the employees involved to meet the emergency successfully. In order to
effectuate the legislative intent that underlies a statute, it is ordinarily inferred that a
19 This phrasing was initially used in a memorandum issued by OMB Director James McIntyre on September 30, 1980,
and repeated in a November 17, 1981, memorandum by OMB Director David Stockman. Subsequent OMB memoranda
in advance of anticipated shutdowns refer to the 1980 and 1981 memoranda as guidance in preparing shutdown plans.
See, for example, OMB Director Alice M. Rivlin, “Memorandum for Heads of Executive Departments and Agencies:
Agency Plans for Operations During Funding Hiatus,” OMB Memorandum M-95-18, August 22, 1995, available on
line as Appendix A-1 at http://www.opm.gov/furlough/furlough.asp.
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statute “carries with it all means necessary and proper to carry out properly the purposes
of he law.”
OMB memoranda provide a fairly long list of examples of activities permitted to continue on the
grounds they protect life and property, including inpatient and emergency outpatient medical care;
public health and safety activities; air traffic control; border protection; care of prisoners; law
enforcement; disaster assistance; preservation of the banking system; borrowing and tax
collection; power production and distribution; and protection of research property. The
“protection of property” exception in itself appears to provide the basis for a quite wide range of
government activities to continue.
2011 DOD Guidance on Operations During a Lapse
of Appropriations
DOD’s most recent guidance for operating under a lapse of appropriation – which currently is
being updated, was filed with OMB in 2011. The document, issued by then-Deputy Secretary of
Defense William Lynn, begins with a cover memo laying out DOD policy in general terms:
Excerpts from
Office of the Deputy Secretary of Defense
“Guidance for Continuation of Operations in the Absence of Available
Appropriations”
December 11, 2011
The Department will, of course, continue to prosecute the war in Afghanistan, including
preparation of forces for deployment into that conflict. The DOD will also continue completion of
the military commitment in Iraq. The Department must, as well, continue many other operations
necessary for the safety of human life and protection of property, including operations essential
for the security of our nation. These activities will be “excepted” from cessation; all other
activities would need to be shut down in an orderly and deliberate fashion, including -with few
exceptions -the cessation of temporary duty travel.
All military personnel will continue in a normal duty status regardless of their affiliation with
excepted or non-excepted activities. Military personnel will serve without pay until such time as
Congress makes appropriated funds available to compensate them for this period of service.
Civilian personnel who are engaged in excepted activities will also continue in normal duty status
and also will not be paid until Congress makes appropriated funds available. Civilian employees
not engaged in excepted activities will be furloughed, i.e., placed in a non-work, non-pay status.
The responsibility for determining which functions would be excepted from shut down resides
with the Military Department Secretaries and Heads of DOD Components, who may delegate this
authority as they deem appropriate. The attached guidance should be used to assist in making
this excepted determination. The guidance does not identify every excepted activity, but rather
provides overarching direction and general principles for making these determinations. It should
be applied prudently in the context of a Department at war, with decisions guaranteeing our
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continued robust support for those engaged in that war, and with assurance that the lives and
property of our Nation’s citizens will be protected.
Examples of “Exempt” and “Non-Exempt” Activities (2011 DOD memo)
Following is an additional excerpt from the 2011 DOD shutdown planning guidance which,
although not comprehensive, provides in more detail illustrative examples of the types of DOD
activities that would and would not be excepted, in case of a lapse of appropriation.20
Addition Excerpts from
Office of the Deputy Secretary of Defense
“Guidance for Continuation of Operations in the Absence of Available
Appropriations”
December 11, 2011
The information provided in this document is not exhaustive, but rather illustrative, and is
intended primarily to assist in the identification of those activities that may be continued
notwithstanding the absence of available funding authority in the applicable appropriations
(excepted activities). Activities that are determined not to be excepted, and which cannot be
performed by utilizing military personnel in place of furloughed civilian personnel, will be
suspended when appropriated funds expire. The Secretary of Defense may, at any time, determine
that additional activities shall be treated as excepted.
Military Personnel
Military personnel are not subject to furlough. Accordingly, military personnel on active duty,
including reserve component personnel on Federal active duty, will continue to report for duty
and carry out assigned duties. In addition to carrying out excepted activities, military personnel
on active duty may be assigned to carry out non-excepted activities, in place of furloughed
civilian personnel, to the extent that the non-excepted activity is capable of performance without
incurring new obligations.
Reserve component personnel performing Active Guard Reserve (AGR) duty will continue to
report for duty to carry out AGR authorized duties. Reserve component personnel will not
perform inactive duty training resulting in the obligation of funds, except where such training
directly supports an excepted activity, and may not be ordered to active duty, except in support of
those military operations and activities necessary for national security listed in Attachment 2,
including fulfilling associated pre-deployment requirements. Orders for members of the National
Guard currently performing duties under 32 U.S.C. 502(f) will be terminated unless such duties
are in support of excepted activities approved by the Secretary of Defense.
Movement of military personnel will be limited as follows:
20 In this excerpt, as in the original document, some of the material is formatted as bulleted lists. Footnotes to the
excerpted material are from the original document.,
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1) Moves TO an excepted activity will continue.
2) Moves FROM an excepted activity will continue only to the extent the commander of the
excepted activity determines it essential to mission (e.g., overburden of local infrastructure), or
required to enhance support of excepted activities.
3) Accession and training moves associated with recruitment and initial entry training will
continue, along with subsequent movement to first station when required by “1” above.
4) Movement to comply with separation instructions will continue.
Civilian Personnel
Civilian personnel, including military technicians, who are not necessary to carry out or support
excepted activities are to be furloughed. Only the minimum number of civilian employees
necessary to carry out excepted activities will be exempt from furlough. Positions that provide
direct support to excepted positions may also be deemed excepted if they are critical to
performing the excepted activity. Determinations regarding the status of civilian positions will be
made on a position by position basis, using the guidance in this document. Determinations shall
be made for all positions, including those in the Senior Executive Service or equivalent, as well as
those located overseas.
Following the expiration of appropriations, a minimum number of civilian employees may be
retained as needed to execute an orderly suspension of non-excepted activities within a
reasonable timeframe.
Senate-confirmed officials appointed by the President are not subject to furlough. Their
immediate office personnel necessary to support excepted activities may be exempt from furlough
at the discretion of the appointee.
Foreign national employees paid with host country funds are exempt from furlough. Additionally,
foreign national employees governed by country-to-country agreements that prohibit furloughs
are exempt from furlough.
Civilian personnel whose salaries are paid with expired appropriations and later reimbursed
from a non-DOD source (e.g., the Foreign Military Sales Trust Fund) are not exempt from
furlough solely on that basis. Personnel whose salaries are paid from a DOD appropriation or
fund that has sufficient funding authority (e.g., multiyear appropriations with available balances
from prior years) will not be subject to furlough. Heads of activities may, on their authority,
require the return to work of civilian personnel in the event of developments (natural disasters,
accidents, etc.) that pose an imminent danger to life or property.
Temporary Duty (TDY) Travel
In the absence of appropriations, TDY travel scheduled to begin after the shutdown occurs should
be cancelled, except as noted below. Any TDY travel that began prior to the shutdown should,
except as noted below, be terminated as quickly as possible, but in an orderly fashion.
All TDY travel in direct support of the war in Afghanistan and the transition in Iraq, and other
travel directly related to safety of life and protection of property, as well as foreign relations (e.g.,
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negotiating international agreements), may be undertaken or continued only if approved, in
writing, by the appropriate approval authority ... and only in the most limited circumstances.....
Contracts
Contractors performing under a contract that was fully obligated upon contract execution (or
renewal) prior to the expiration of appropriations may continue to provide contract services,
whether in support of excepted activities or not. However, new contracts (including contract
renewals or extensions, issuance of task orders, exercise of options) may not be executed unless
the contractor is supporting an excepted activity. No funds will be available to pay such new
contractors until Congress appropriates additional funds. The expiration of an appropriation
does not require the termination of contracts (or issuance of stop work orders) funded by that
appropriation unless a new obligation of funds is required under the contract and the contract is
not required to support an excepted activity. In cases where new obligation is required and the
contract is not required to support an excepted activity, the issuance of a stop work order or the
termination of the contract will be required.
The Department may continue to enter into new contracts, or place task orders under existing
contracts, to obtain supplies and services necessary to carry out or support excepted activities
even though there are no available appropriations. It is emphasized that this authority is to be
exercised only when determined to be necessary -where delay in contracting would endanger
national security or create a risk to human life or property.
Additionally, when authorized by the Secretary of Defense, contracts for covered items may be
entered into under the authority of the Feed and Forage Act.
Protection of Life and Property/National Security21
• Military operations and activities authorized by deployment or execute orders, or
otherwise approved by the Secretary of Defense, and determined to be necessary
for national security, including administrative, logistical, medical, and other
activities in direct support of such operations and activities; training and
exercises required to prepare for and carry out such operations.
• Activities of forces assigned or apportioned to combatant commands to execute
planned or contingent operations necessary for national security, including
necessary administrative, logistical, medical, and other activities in direct
support of such operations; training and exercises required to prepare for and
carry out such operations.
• Activities necessary to continue recruiting for entry into the Armed Forces during
contingency operations (as such term is defined in 10 U.S.C 101(13)), including
activities necessary to operate Military Entrance Processing Stations (MEPS)
21 Activities involving technical intelligence information collection, analysis and dissemination functions not in direct
support of excepted activities (e.g., general political and economic intelligence unrelated to ongoing or contingency
military operations, support of acquisition programs, support to operational test and evaluation, intelligence policy
security promulgation and development, systems development and standards, policy and architecture) are not excepted
activities.
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and to conduct basic and other training necessary to qualify such recruited
personnel to perform their assigned duties.
• Command, control, communications, computer, intelligence, surveillance, and
reconnaissance activities required to support national or military requirements
necessary for national security or to support other excepted activities, including
telecommunications centers and phone switches on installations, and secure
conference capability at military command centers.
• Activities required to operate, maintain, assess, and disseminate the collection of
intelligence data necessary to support tactical and strategic indications and
warning systems, and military operational requirements. Activities necessary to
carry out or enforce treaties and other international obligations.
Safety of Persons and Protection of Property
• Response to emergencies, including fire protection, physical and personnel
security, law enforcement/counter terrorism, intelligence support to terrorist
threat warnings, Explosive Ordnance Disposal operations, emergency salvage,
sub-safe program, nuclear reactor safety and security, nuclear weapons, air
traffic control and harbor control, search and rescue, utilities, housing and food
services for military personnel, and trash removal.
• Emergency repair & non-deferrable maintenance to utilities, power distribution
system buildings or other real property, including bachelor enlisted quarters
(BEQ), bachelor officers’ quarters (BOQ), and housing for military personnel.
• Repair of equipment needed to support services for excepted activities, including
fire trucks, medical emergency vehicles, police vehicles, or material handling
vehicles.
• Monitoring and maintaining alarms and control systems, utilities, and emergency
services.
• Receipt/safekeeping of material delivered during shutdown.
• Control of hazardous material and monitoring of existing environmental
remediation.
• Oil spill/hazardous waste cleanup, environmental remediation, and pest control,
only to the extent necessary to prevent imminent danger to life or property.22
• Safe storage or transportation of hazardous materials, including ammunition,
chemical munitions, photo processing operations.
• Emergency reporting response and input to the National Response Team and
coordinating with Environmental Protection Agency (EPA) and other agencies on
fire, safety, occupational health, environmental, explosive safety for vector borne
disease management.
22Activities in support of environmental requirements which are not necessary to prevent imminent threat to life or
property are not excepted activities.
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• Activities, both in the Continental United States (CONUS) and overseas, required
for the safety of DOD or other U.S. Government employees or for the protection
of DOD or other U.S. Government property.
• Defense support to civil authorities in response to disasters or other imminent
threats to life and property, including activities of the U.S. Army Corps of
Engineers with respect to responsibilities to state and local governments that
involve imminent threats to life or property.
• Foreign humanitarian assistance in response to disaster or other crises posing
an imminent threat to life.
• Emergency counseling and crisis intervention intake screening and referral
services. Suicide and substance abuse counseling.
• Counterdrug activities determined to be necessary for the protection of life or
property.
• Operation of mortuary affairs activities and attendant other services necessary to
properly care for the fallen and their families.
• Other activities authorized by the Secretary of Defense to provide for the safety of
life or protection of property.
Medical and Dental Care23
• Inpatient care in DOD Medical Treatment Facilities and attendant maintenance
of patient medical records.24 25
• Acute and emergency outpatient care in DOD medical and dental facilities.
• Private Sector Care under TRICARE.
• Certification of eligibility for health care benefits.
• Veterinary Services that support excepted activities (i.e., food supply and service
inspections).
Acquisition and Logistic Support
• Contracting, contract administration, and logistics operations in support of
excepted activities.
• Activities required to contract for and to distribute items as authorized by the
Feed and Forage Act (e.g., clothing, subsistence, forage, fuel, quarters,
transportation, and medical and hospital supplies).
• Central receiving points for storage of supplies and materials purchased prior to
the shutdown.
23 Contingency planning in medical command headquarters not immediately necessary to support excepted activities is
not an excepted activity.
24 Elective surgery and other elective procedures in DOD medical and dental facilities are not excepted activities.
25 Surgery to continue recovery of function/appearance of Wounded Warriors is an excepted activity.
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Education and Training26
• Education and training necessary to participate in or support excepted activities;
• DOD Education Activity (DODEA) educational activities.27
Legal Activities
• Litigation activities associated with imminent or ongoing legal action, in forums
inside or outside of 000, to the extent required by law or necessary to support
excepted activities.
• Legal support for excepted activities, including legal assistance for military and
civilian employees deployed, or preparing to deploy, in support of military or
stability operations.
• Legal activities needed to address external (non-judicial) deadlines imposed by
non-DOD enforcement agencies, to the extent necessary to continue excepted
activities.
Audit and Investigation Community
• Criminal investigations related to the protection of life or property, including
national security, as determined by the head of the investigating unit, and
investigations involving undercover activities.
• Counterterrorism and counterintelligence investigations.
Morale, Welfare and Recreation/Non-appropriated Funds
• Morale, Welfare, and Recreation (MWR) and Non-Appropriated Fund (NAF)
activities necessary to support excepted activities, e.g., operation of mess halls;
physical training; child care activities required for readiness.28
Financial Management
• Activities necessary to control funds, record new obligations incurred in the
performance of excepted activities, and manage working capital funds.29
26 Installation education centers may continue to operate utilizing military personnel, so that private agencies such as
colleges and universities may provide courses for which payment bas already been made. Civilian employees on TDY
for training or education associated with non-excepted activities should be returned to their home stations as part of the
orderly closedown of operations. Civilian personnel on PCS orders attending training or educational activities should
remain in place.
27 DODEA summer school activities are non-excepted activities.
28 Activities funded entirely through NAF sources will not be affected. Military personnel may be assigned to carry out
or support non-excepted MWR activities, where deemed necessary or appropriate, to replace furloughed employees.
29 Preparation of financial reports, research and correction of problem disbursements, adjustments to prior-year funds
(excepted as noted above) including those related to programs and contracts that do not support excepted activities, and
approval of the use of currently available funds to pay obligations against closed accounts arc not excepted activities.
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• Activities necessary to effect upward adjustment of obligations and the
reallocation of prior-year unobligated funds in support of excepted activities.
Working Capital Fund/Revolving Fund30
• Defense Working Capital Fund (DWCF)/ Revolving Fund (RF) activities with
positive cash balances may continue to operate until cash reserves are exhausted.
• When cash reserves are exhausted, DWCF/RF activities must continue
operations in direct support of excepted activities.
• DWCF/RF activities may continue to accept orders financed with appropriations
enacted prior to the current fiscal year or unfunded orders from excepted
organizations. Unfunded orders will be posted to accounts receivable and not
actually billed until appropriations are enacted.
Examples of “Exempt” and “Non-Exempt” Activities
from 1998 Army Memo
Somewhat more detailed than the 2011 DOD guidance memo is the Army guidance document
released in August 1998 by the Office of the Assistant Secretary of the Army (Financial
Management and Comptroller) entitled “Continuing Resolution Authority General Guidance.”
Chapter 3, entitled “Rules for Operations in the Absence of CRA,” provides an extensive, though
by no means complete, list of activities that were deemed at the time to be “exempt” from a
shutdown and those that were not.
The excerpts reprinted here shows an illustrative selection of the 1998 Army guidelines—the
entire breakdown is available, as noted, on line (see footnote 6).
Excerpts from
Office of the Asst. Secretary of the Army (Financial Management and Comptroller)
“Continuing Resolution Authority General Guidance”
August 1998
National security.
(1) Exempt activities.
(a) Units identified in and administrative, logistics and maintenance functions required to
support Joint Staff contingency program major regional contingency tasking.
30 DWCFs/RFs are not directly impacted by a lapse in annual appropriations. Management actions should be taken to
sustain operations and minimize operational impact resulting from late approval of annual appropriations. Management
actions which could be taken to conserve cash reserves include delay of training, minimal travel, reduction in supplies,
and other actions consistent with management objectives. Inter-DWCF/RF billings will continue unless a suspension
request is approved by the Office of the Under Secretary of Defense (Comptroller), Approval may be requested for
advance billing of funded customer orders. Plan guidance for excepted activities is applicable to DWCF/RF internal
operations.
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(b) Units and personnel tasked in direct support of the Single Integrated Operations Plan
(SIOP).
(c) Activities and functions of the Combatant Commander’s, Subordinate Component
Commander’s and Supporting Commander’s headquarters and OSD, Joint Staff, Service and
DOD Agency staffs necessary to ensure operations and maintenance integrity of essential
C4I systems.
(d) Units and activities required to operate, maintain, assess and disseminate the collection
of intelligence data necessary to support tactical and strategic indications, warning, and
supporting force enhancement roles.
(e) Forward based combat, combat support and combat service support units.
(f) Forward deployed units executing CJCS or CINC operations/deployment orders, those
units in operation work-up status to execute those orders and those units and activities
required in direct support of those tasks.
(g) Units and personnel supporting ongoing international treaties, commitments, essential
peacetime engagement and counterdrug operations.
(h) Units and personnel preparing for or participating in operational exercises.
(i) Essential operational training necessary to execute operational, contingency and wartime
tasking.
(2) Non-exempt activities.
(a) Forces identified as available T+91 and beyond.
(b) All other units not in direct support of exempted units, functions or activities.
(c) Technical intelligence information collection, analysis and dissemination functions not in
direct support of exempted activities (e.g., general political and economic intelligence
unrelated to ongoing or contingency military operations, support of acquisition programs,
support to operational test and evaluation, intelligence policy security promulgation and
development, systems development and standards, policy and architecture).
(d) Training exercises not essential to the execution of wartime, contingency or OPLAN
tasking.
Military and Civilian Personnel.
(1) Exempt activities.
(a) All active duty military personnel and all reservists on active duty. Duty assignments may
be changed by local commanders to support exempt activities.
(b) Reserve Components in direct support of exempted activities…
(d) Senate-confirmed officials appointed by the President and their immediate office
personnel
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(e) Civilian personnel in direct support of exempted activities, and additional civilian
personnel designated by the Secretary of Defense.
(2) Non-exempt activities.
(a) Civilian personnel (including host nation funded foreign national employees) not in
direct support of exempted activities.
(b) Military Personnel Selection Boards and Administrative Boards.
(c) Civilian personnel whose salaries are paid with annual appropriations and later
reimbursed from another source (e.g., the Foreign Military Sales Trust Fund).
....
DOD Medical and Dental Care.
(1) Exempt activities.
(a) Direct patient care personnel in DOD facilities (including Uniformed Services Treatment
Facilities) including doctors, nurses, medical technicians, dentists, and essential support
personnel (cooks, custodians, etc.).
(b) Contingency planning in Medical Treatment Facilities.
(c) All inpatient care in Medical Treatment Facilities
(d) All acute and emergency outpatient care in DOD medical and dental facilities
(e) DOD health care contracts for inpatient care/acute outpatient care, including medical
supplies.
(f) Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) and
TRICARE contracts.
(g) Veterinary services that support exempted activities (e.g., food supply and service
inspections).
(h) Minimum civilian personnel necessary to provide certification of eligibility for health
care benefits.
(2) Non-exempt activities
(a) Civilian administrative staff in Medical Treatment Facilities and dental facilities not
involved in exempted patient care.
(b) Civilian personnel in major medical command headquarters who are not involved in
contingency planning.
(c) Elective surgery in DOD Medical Treatment Facilities for non-active duty personnel…
(d) Routine physicals, preventive dental procedures, or other routine medical procedures
(including vaccinations) in DOD Medical Treatment Facilities for non-active duty
personnel…
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(e) Persian Gulf Illness Hotline.
Training and Education.
(1) Exempt activities.
(a) Educational activities deemed necessary for immediate support of exempted activities.
(b) Educational activities not otherwise exempted if undertaken by active duty military
personnel for other active duty military personnel only…
(d) Department of Defense Dependents Schools and Section 6 Schools…
Recruiting.
(1) Exempt activities.
(a) Military recruiters may continue to staff recruiting offices and may contact prospective
recruits if administrative office expenses have been paid with prior year funds.
(b) Military staff of Military Enlistment Processing Stations (MEPS) will report for duty.
(c) Recruiting advertising purchased with prior year funds will continue to be utilized.
(2) Non-exempt activities.
(a) Official vehicles cannot be used to transport recruiters of prospective recruits.
(b) New enlistment contracts cannot be executed.
(c) New recruits are not permitted to report to MEPS, or to report for induction.
(d) Civilian administrative staff and contract physicians assigned to MEPS will not report
for duty.
(3) Explanatory notes. The Secretary of Defense reserves the right to reverse the above
guidance and resume normal recruiting activities after a lapse of 5 working days to avoid
longer term disruption that would impair readiness. Resumption of recruiting activity is not
automatic after 5 days and may be implemented only by direction of the Secretary of
Defense.
Permanent Change of Station (PCS and Temporary Duty (TDY)…
(2) Non-exempt activities. PCS moves and TDY travel for active duty, reserve, and civilian
personnel engaged in non-exempt activities during a lapse in appropriations will not be
authorized. Non-exempt personnel on TDY will return to home station as part of shutdown
procedures…
Contracting activities.
(1) Exempt activities.
(a) Contracts for functions that would otherwise be exempt if performed by government
employees.
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(b) New contracts for exempted activities…
(2) Non-exempt activities.
(a) Administration of existing contracts for non-exempt activities.
(b) Negotiation, preparation and execution of new contracts for non-exempt activities…
(d) Contract reconciliation and closeout activities.
(3) Explanatory notes.
(a) Contracts funded with current year funds that do not support exempt activities, will be
terminated when available funding has been exhausted. Contract terms should be structured
to allow for orderly termination of the contract in the event of a funding gap and for
reinstatement of the contract when funds become available. Contracting officers should work
with contractors to minimize the impact of a lapse in funding. It should be understood that
termination of a contract due to a funding gap is beyond the control of the contracting
officer or contracting activity, and that contractor protests of such a termination are not
generally considered to be justified.
(b) For contract actions, options, and modifications, not within the scope of the original
contact, in direct support of exempt activities, the contracting officer will cite one of three
authorities for these obligations: (1) the Constitution as interpreted by Attorney General
opinions for general support of National Security operations, (2) 41 U.S.C. 11 for
obligations covered by the Feed and Forage Act, and (3) 31 U.S.C. 1342 for obligations for
protection of life and property against imminent danger…
Financial Management.
(1) Exempt activities.
(a) Minimum essential personnel needed to record new obligations incurred in the
performance of exempt functions/operations, and to manage AWCR [Army Working Capital
Fund] cash.
(b) Obligation adjustment and reallocation of prior year unobligated funds in support of
exempt functions/operations.
(2) Non-exempt activities.
(a) Preparation of budget submission data.
(b) Closing of accounts that expired in the previous fiscal year…
(d) Investigation of Anti-deficiency Act violations.
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Assessing the Effects of a Government Shutdown
on Defense
Effects on Military Operations
The 1998 Army guidance on a shutdown directs that “All military personnel shall continue to
report for duty.” Not all units will continue to operate, however, and military personnel may be
assigned to other than their regular duties. Among the units and activities that the Army identifies
as being exempt from a shutdown are:
• Forward deployed units executing … operations…, those units in operation
work-up status…, and those units and activities required in direct support of
those tasks;
• Forward based combat, combat support and combat service support units;
• Units identified in and administrative, logistics and maintenance functions
required to support Joint Staff contingency program major regional contingency
tasking;
• Units and personnel tasked in direct support of the Single Integrated Operations
Plan (SIOP);
• Essential operational training necessary to execute operational, contingency and
wartime tasking.
Similar guidelines are reflected in the 2011 DOD guidance. These guidelines specifically identify
a number of named military operations which are directed to continue, along with supporting
operations. Operations such as those in Iraq and Afghanistan would continue, units preparing for
deployment would carry on their training and other deployment preparations, and activities
needed to support operations and training would continue. In addition, units identified for
deployment in plans for major regional contingencies would remain active, as would units
assigned to carry out strategic nuclear operations (i.e., in support of the SIOP).
The legal authority for critical military operations to continue, therefore, is reasonably clear.
Army guidance also provides that all other activities needed, in the view of local commanders, to
support these “exempt” activities, may carry on, including logistics, intelligence,
communications, and contracting functions. Guidance also defines quite broadly the range of
activities that are permitted to continue in support of operational forces, including personnel
support activities such as defense dependent schools and child care, temporary duty travel in
support of exempted activities, and new contracts for exempted activities. The Administration is
free to change these guidelines, based on its own interpretation of relevant laws and regulations.
Nonetheless, though authority to sustain ongoing military operations is clear in principle, a lapse
in appropriations, if it were to extend for more than a very limited period of time, could disrupt
operations to some degree. As the DOD and Army guidance illustrate, efforts to distinguish
between, on the one hand, those activities that are sufficiently important for national security to
warrant continuation during a lapse in appropriations and, on the other hand, activities that do not
directly support national security involve difficult, and to some degree, arbitrary judgments. Unit
training would continue for some combat units, but not for others, depending on their place in
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force generation plans. Medical personnel would continue to provide services to active duty
personnel, but not to dependents or retirees who might normally receive non-emergency services
in the same facilities. Issuance of some contracts would continue during a shutdown, but other
contracting activity, perhaps done by the same people, would not. Local commanders would have
the authority to make final judgments on the need for activities to support necessary capabilities,
with the result that decisions on what activities may continue and what must be shut down may
not be consistent across the whole force.
Effects on Military and Civilian Personnel
Virtually all military personnel and most civilians are normally paid out of annual appropriations.
In the event of a lapse in appropriations, such funds would not be available. Exceptions to
Antideficiency prohibitions on funding permit obligations of funds in advance of appropriations,
but not expenditures. Military personnel and civilian personnel paid through annual funds,
therefore, cannot be issued pay checks. Personnel, whether excepted from a furlough or not,
would be subjected to financial hardships if a lapse in appropriations extends past a normal pay
date, since no disbursements may be made even for amounts that are earned by those who are not
on furlough. For uniformed military personnel, if a funding lapse begins on October 1 and
appropriations are approved on October 10, military personnel would receive their full pay for the
period October 1-15 on October 15, their next scheduled pay date. Otherwise, they would receive
no pay on October 15.
For DOD civilians, who are paid on the same bi-weekly schedule as other non-military federal
employees, the situation is more complicated. The last federal bi-weekly pay period the begins in
FY2013 runs from Sunday, September 22, through Saturday, October 5. If FY2014 appropriations
have not been enacted by October 5, excepted employees who remained at their jobs would be
paid only for the six working days (out of 10) that fell within FY2013, receiving no pay for the
four days worked in FY2014.
The hardships that a sudden stop in pay would impose on military and civilian personnel, would,
of course, vary depending on individual circumstances. Families with a second income and with
substantial savings might be able to manage with few problems. Others, particularly deployed
personnel with young families and limited savings, might be affected very badly. As the Army
guidance notes, a key responsibility on the part of local commanders would be to assist families
affected by financial hardships, by, for example, working with local credit unions, other lenders,
and creditors to accommodate gaps in military and civilian pay.
Effects of Limits on Expenditures on Contracting
In the event of a lapse in funding, the Defense Department would have the authority to obligate
funds for goods and services needed to sustain its continuing operations—that is, it can sign
contracts with a binding commitment to pay providers—but it does not have authority to issue
checks for amounts obligated in advance of appropriations. It is not clear that all vendors would
be willing to provide goods or services under those circumstances, particularly if a shutdown
appears likely to continue for an extended period.
There is also likely to be a considerable amount of confusion among contractors because funds
remaining available from prior years can continue to be distributed, but not new funds. In DOD
appropriations acts, funding for R&D is typically available for obligation for two years, for most
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procurement for three years, and for shipbuilding for five years. Contract authority to purchase
stocks of material for inventories is not limited by fiscal year. Unobligated balances of funds for
those purposes would remain available even in the absence of new funding.
Money for operation and maintenance, however, is generally available for obligation for only one
year, so most funding for day-to-day operations of the department would lapse and operations
could continue only under the Antideficiency Act exceptions that allow the obligation of funds,
but not disbursements. Whether vendors could be paid, therefore, depends on which pot of money
obligations are made from, and money for more immediate, readiness-related activities would
generally not be used to make prompt payments.
Under the circumstances, the Defense Department can be expected to sustain its most important
operations, but not without some difficulties in managing the acquisition of material and services
from vendors.
Author Contact Information
Pat Towell
Amy Belasco
Specialist in U.S. Defense Policy and Budget
Specialist in U.S. Defense Policy and Budget
ptowell@crs.loc.gov, 7-2122
abelasco@crs.loc.gov, 7-7627
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