The Federal Fiscal Year
The federal fiscal year runs from October 1 to September 30. FY2025 started on October 1, 2024 and ends September 30, 2025. This is different from the calendar year that most commercial businesses follow, and it creates distinct procurement cycles that savvy contractors can leverage.
Congress authorizes and appropriates federal spending through a budgeting process that ideally concludes before October 1 of each year. In practice, the process frequently extends past this deadline, resulting in Continuing Resolutions (CRs) that temporarily fund the government at prior-year levels. CRs create uncertainty and often delay new contract awards.
Quarterly Spending Patterns
Federal spending follows a predictable quarterly pattern. Q1 (October-December) is a transition period where agencies finalize requirements and begin new procurement cycles. Q2 (January-March) sees increasing solicitation activity as requirements are defined and approved. Q3 (April-June) is prime proposal season with heavy solicitation volume.
Q4 (July-September) is the famous "end-of-year spending rush." Agencies must obligate their annual budgets before September 30 or risk losing unspent funds. This creates a surge in contract awards, especially for smaller purchases and task orders. Historically, 30-40% of annual contracting dollars are obligated in the fourth quarter.
Continuing Resolutions and Their Impact
When Congress fails to pass appropriations bills by October 1, a Continuing Resolution (CR) funds the government temporarily at the prior year’s levels. During a CR, agencies generally cannot start new programs or increase spending above prior-year levels. This delays new contract awards and procurement actions.
CRs create both challenges and opportunities. New solicitations may be delayed, reducing the pipeline of opportunities. But when the CR ends and full-year appropriations are enacted, there’s often a compressed procurement timeline as agencies rush to execute delayed actions. Being prepared for this compressed timeline gives you a competitive edge.
Government shutdowns (when neither appropriations nor a CR is enacted) are more severe, halting most procurement activities entirely. Existing contracts generally continue, but new awards stop and many government employees are furloughed.
Timing Your Business Development
Align your business development activities with the budget cycle. Build relationships with contracting officers and program managers in Q1-Q2, when they’re planning their procurement strategies for the year. Respond to sources sought notices and attend industry days during this period.
Be ready with capability statements, updated SAM.gov registration, and proposal-ready staff during Q3-Q4. Monitor for new solicitations aggressively starting in April, and ensure you have the capacity to respond to multiple opportunities simultaneously during the busy summer months.
Track specific agency procurement forecasts, published annually by most departments. These forecasts list planned procurements for the fiscal year, giving you advance notice of upcoming opportunities months before they hit SAM.gov.
Rhythm and Readiness
The federal budget cycle creates a rhythm to government purchasing that rewards prepared contractors. By understanding quarterly spending patterns, anticipating CR impacts, and timing your business development activities to match the cycle, you can position your company to capture more opportunities.
Start tracking fiscal year deadlines and agency procurement forecasts now. The contractors who win consistently are the ones who are ready when the opportunities appear, not the ones scrambling to react after the solicitation is posted.