Government Shutdown: Operations of the Department of Defense During a Lapse in Appropriations

Congressional research reportOct 15, 2013

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Government Shutdown: Operations of the

Department of Defense During a Lapse in

Appropriations

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Specialist in U.S. Defense Policy and Budget

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Specialist in U.S. Defense Policy and Budget

October 15, 2013

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R41745

Government Shutdown: Operations of the Department of Defense During a Lapse in Appropriations

Summary

Because Congress did not provide any FY2014 funding for the Department of Defense (DOD) by

October 1, 2013, the beginning of the new fiscal year, DOD, like other agencies, is now subject to

a lapse in appropriations during which agencies are generally required to shut down. The Office

of Management and Budget (OMB), however, 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.”

With the approach of the Treasury Department’s estimate of an October 17, 2013, deadline for

raising the debt ceiling, concerns have grown about the potential effect on government programs

and workers. If the Treasury Department were to continue the current practice of paying bills as

they come due, DOD programs ranging from payments to military retirees to contractor bills

could be delayed or reduced, a situation that differs from the current government shutdown. It is

difficult to predict effects because of the uncertainty about Treasury actions, but payment delays

could affect all programs and personnel. Negotiations are currently underway to deal with the

upcoming deadline.

Concerns about DOD’s implementation of the government shutdown continue. On September 25,

2013, DOD issued guidance and a contingency plan that limited the types of “excepted” activities

that would continue to be carried out during a shutdown to military operations, unspecified other

operations and national security activities, and those necessary to protect the safety of persons

and property. As a result, during the 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. Those civilian personnel who support “excepted”

activities—roughly half of DOD’s 750,000 civilians—would continue to report for work while

the remainder would be furloughed and not paid. Normally, such “excepted” military and civilian

personnel would continue to work but would not be paid until after appropriations are

subsequently provided.

With enactment of H.R. 3210, the Pay Our Military Act (POMA), on September 30, 2013,

however, many defense personnel will be paid on time, including all active-duty personnel, most

civilians, and some contractor personnel. On October 5, 2013, Secretary of Defense Chuck Hagel

announced that the language in H.R. 3210 would allow DOD to recall most but not all of its

civilian employees to work. In addition to those DOD civilians already designated as “excepted,”

the Administration interpreted H.R. 3210 as permitting the Secretary to recall (and start to pay)

those DOD civilians “whose responsibilities contribute to the morale, well-being, capabilities and

readiness of service members.” This revision of DOD’s Contingency Plan would increase the

number of DOD civilians returning to work from roughly 50% to about 95%, according to DOD

Comptroller Robert Hale. As the services and DOD components implement this decision,

civilians will return to work starting this week, and be paid on time under H.R. 3210.

DOD is continuing to review whether the number of contractor personnel, also covered under

H.R. 3210, will be increased. Those defense civilian or contractor personnel who were or remain

furloughed would only receive pay for that period if Congress passes legislation to pay

furloughed personnel. On October 5, 2013, the House unanimously passed H.R. 3223, which

would provide retroactive pay for all federal employees, as occurred during the 1995 to 1996

shutdown. The President has announced his support of the bill. The Senate has not yet taken it up.

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Government Shutdown: Operations of the Department of Defense During a Lapse in Appropriations

On October 10, 2013, in reaction to considerable controversy in Congress, the President signed

H.J.Res. 91, Honoring the Families of Fallen Soldiers Act, to provide for payment of death

gratuities and other funeral expenses. Both houses had passed the bill unanimously. Previously,

the Secretary of Defense had determined that such expenses were not covered under POMA.

CBO estimates that the new law would cost about $150 million over the course of a year.

On October 2 and October 3, 2013, the House passed five “mini” Continuing Resolutions (CRs)

providing funding for the District of Columbia, NIH, various museums, Veterans Administration

disability programs, and pay for non-activated reservists, generally at FY2013 levels including

the sequester now in effect. That package includes H.R. 3230, which would expand the number of

reservists who would be paid on time from activated reservists (such as those deployed for the

Afghan war) who are already covered by H.R. 3210, to non-activated duty reservists who are

performing weekend drills. Based on press reports of reactions from the Senate leadership,

however, the Senate is not likely to take up the bill.

The authority to continue some activities during a lapse in appropriations is governed by the

Antideficiency Act, 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.

In addition to military operations, other activities that would continue under a shutdown by virtue

of the Anti-Deficiency Act include operation of DOD Dependent Schools, child care centers, and

DOD medical activities, including TRICARE services for dependents, but not non-essential

services, such as elective surgery in military medical facilities. Passage of POMA considerably

broadened the types of support activities, primarily performed by civilians, that would continue

during the shutdown. A CBO estimate suggests that POMA appropriated $200 billion, or about

one-third or of DOD’s $614 billion FY2014 request.

The roughly 5% of DOD’s civilians who would continue to be furloughed continue to face a pay

gap, potentially imposing hardships on many families, unless legislation providing retroactive pay

is enacted. Contracting activities that supported military activities and payments to vendors

derived from prior multiyear appropriations could also continue. The status of many contractor

personnel remains unclear. While some new contract obligations to support “excepted” activities

could be signed, monies could not be disbursed while other new contracts would be delayed. This

could create some confusion and, potentially, disruptions to supplies of some material and

services, particularly if full funding for DOD is not restored soon.

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Government Shutdown: Operations of the Department of Defense During a Lapse in Appropriations

Contents

Introduction...................................................................................................................................... 1

Distinctions Between a Shutdown and Reaching the Debt Ceiling ........................................... 1

Recent Developments in the Shutdown ..................................................................................... 2

DOD Revises Its Guidance on Furloughing Certain Civilians............................................ 3

The Issue of Retroactive Pay for Civilians.......................................................................... 5

The Issue of Pay for Guard and Reserve Drill Training ...................................................... 5

DOD’s Contingency Plan for a Shutdown .......................................................................... 5

Debate over Interpretation of H.R. 3210, “Pay Our Military Act”...................................... 6

Questions About DOD Operations During a Lapse in Funding ...................................................... 8

Implications of DOD Guidance ..................................................................................................... 12

Effects on Military, Civilian, and Contractor Personnel .......................................................... 13

Effects of Limits on Expenditures on Contracting .................................................................. 13

Authorities and Conditions Affecting DOD Operations in the Absence of Appropriations .......... 14

The Antideficiency Act .................................................................................................................. 16

OMB and Justice Department Guidance on DOD Activities Permitted During a Lapse in

Appropriations ............................................................................................................................ 17

Appendixes

Appendix A. 2013 DOD Guidance on Operations During a Lapse of Appropriations .................. 20

Appendix B. DOD, “Guidance for Implementation of Pay Our Military Act,” October 5,

2013 ............................................................................................................................................ 27

Contacts

Author Contact Information........................................................................................................... 30

Acknowledgments ......................................................................................................................... 30

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Government Shutdown: Operations of the Department of Defense During a Lapse in Appropriations

Introduction

Because Congress did not provide funding for FY2014, the new fiscal year beginning October 1,

2013, the Department of Defense (DOD), like other agencies, is now 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 are now furloughed after working only

long enough to ensure an orderly shutdown.3

On September 25, 2013, Deputy Secretary of Defense Ashton B. Carter issued guidance and a

contingency plan to continue essential activities in the event that appropriations lapsed. These

activities included not only the war in Afghanistan (including preparing troops to deploy) but also

other (unspecified in this guidance) military operations, and “many other operations necessary for

safety of human life and protection of property, including operations essential for the security of

our Nation.” Such activities would be considered “excepted” from furloughs. All other activities

would shut down.4

Distinctions Between a Shutdown and Reaching the Debt Ceiling

In testimony before the Senate Finance Committee on October 10, 2103, Secretary of the

Treasury Jacob J. Lew suggested that Treasury believes that the federal government will “run out

of borrowing authority” on October 17, 2013, and will have insufficient cash on hand to meet all

government obligations “including Social Security and Medicare benefits, payments to our

military and veterans, and contracts with private suppliers—for the first time in our history.”5

Under this scenario, DOD benefit programs for military retirement and concurrent receipt could

be delayed if the debt ceiling is not raised, which is not the case during the current government

shutdown, where payments to military retirees are protected, as are salaries of troops, and DOD

civilians after enactment of H.R. 3210, Pay Our Troops Act.

Military operations of the Department of Defense (DOD) are normally funded through annual appropriations provided

in the DOD 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 report.

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.

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 (name redacted).

DOD, “Contingency plan memo,” September 25, 2013.

Statement of Secretary of the Treasury, Jacob J. Lew before the Senate Committee on Finance, “The Debt Limit,”

October 10, 2013; http://www.finance.senate.gov/imo/media/doc/10-10-013%20Final%20Written%20Testimony%20%20Lew1.pdf.

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If the debt ceiling is reached, there is some controversy, however, about whether Treasury could

make distinctions between one type of payment and another rather than simply paying bills as

they come due and are processed. Some have argued that in such a situation the Treasury could

prioritize payments in order to avoid a technical default by paying interest due on debt first as

part of a policy to choose to make certain types of payments before others. The Treasury argues

that it does not have the authority to make such distinctions. In addition, some suggest that

making such distinctions would violate the Impoundment Control Act of 1974 as amended, which

prohibits deferring particular payments.6

In addition to prioritizing payments, Treasury, in 2012, considered but rejected other options,

including

•

asset sales—as against taxpayer interests;

•

across-the-board reductions—as difficult to implement; or,

•

the “least harmful” one of delaying payments, which would be ”worsened each

day ... potentially causing great hardships to millions of Americans and harm to

the economy.”7

It is difficult, if not impossible, to predict potential effects on Department of Defense programs or

benefits because of the uncertainties.8 If payments to defense contractors were delayed, the

government could incur interest penalties, and contractors could eventually face liquidity

problems. If payments to trust funds (Tricare for Life, military retirement) were delayed and not

repaid, the solvency of those funds could be affected. If payments to troops or DOD civilians

were delayed, this could be seen as breaking a contractual relationship, as well as harming

morale.

Recent Developments in the Shutdown

On September 30, 2013, President Obama signed H.R. 3210, the Pay Our Military Act (POMA),

which was passed unanimously earlier in the House and Senate.9 This act provides appropriations

to cover the pay and allowances of all members of the armed forces performing “active service”

(“active service” includes both active duty and full-time National Guard duty),10 and those DOD

Deferrals under the Budget Control Act must be reported to Congress. This section is drawn largely from CRS Report

CRS Report R41633, Reaching the Debt Limit: Background and Potential Effects on Government Operations,

coordinated by (name redacted), pp. 9ff.

Department of the Treasury, Financial Stability Oversight Council Chair, Eric M. Thorson, “Response to questions

form Senator Hatch,” OIF-CA-12-006, August 24, 2012; http://www.treasury.gov/about/organizational-structure/ig/

Audit%20Reports%20and%20Testimonies/Debt%20Limit%20Response%20(Final%20with%20Signature).pdf.

CRS Report RL34680, Shutdown of the Federal Government: Causes, Processes, and Effects, coordinated by (name re

dacted).

H.R. 3210 was passed by 423 to 0 in the House on September 29, and by Unanimous Consent in the Senate on

September 30, 2013.

Active service is defined at 10 USC 101(d)(3). Active duty is defined at 10 USC 101(d)(1) to mean “full-time duty in

the active military service of the United States. Such term includes full-time training duty, annual training duty, and

attendance, while in the active military service, at a school designated as a service school by law or by the Secretary of

the military department concerned. Such term does not include full-time National Guard duty.” Full-time National

Guard duty is defined at 10 USC 101(d)(5) to mean “training or other duty, other than inactive duty, performed by a

member of the Army National Guard of the United States or the Air National Guard of the United States in the

member’s status as a member of the National Guard of a State or territory, the Commonwealth of Puerto Rico, or the

(continued...)

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civilians and contractor personnel whom the Secretary of Defense determines are providing

support to these members of the armed forces. This act ensures that those personnel will be paid

on time rather than being dependent on passage of a full continuing resolution (CR) or regular

appropriations act.11

On October 10, 2013, the President signed H.J.Res. 91, which provides for the payment of death

gratuities and other funeral expenses for military personnel. Known as the “Honoring the

Families of Fallen Soldiers Act,” this act was passed in response to considerable controversy in

Congress and the press about the Secretary of Defense’s determination that these expenses were

not covered under the Pay Our Military Act (POMA), passed on September 30, 2012.

According to the Administration’s interpretation, the language in POMA providing appropriations

to cover “pay and allowances” of active-service personnel did not cover death gratuities, an

interpretation questioned by some Members of Congress and some analysts. An October 9, 2013,

CRS memo, “Payment of Death Gratuities under the Pay Our Military Act,” argues that previous

statutory language provides that death gratuity payments are to be made from “payment to

members” and that POMA language could be construed to include this type of payment.12 During

a House Armed Services hearing on October 10, 2013, on implementation of POMA, several

Members raised concerns about the Department’s interpretation.13

CBO estimates that H.J.Res. 91 will cost $150 million on an annualized basis.14 Like POMA, the

act is in effect until passage of a regular or continuing appropriations act.

DOD Revises Its Guidance on Furloughing Certain Civilians

On October 5, 2013, Secretary of Defense Chuck Hagel announced that after consultation with

the Department of Justice, it was decided that the new law, H.R. 3210, would permit DOD to

recall most, but not all, DOD civilians from furlough rather than the fewer number “excepted”

from furlough under DOD’s original September 25, 2013, Contingency Plan. Under the original

plan, only those DOD civilians whose “support activities are felt directly by covered members of

the armed forces” (i.e., those performing military operations or required for health and safety)

were “excepted” (see Appendix A).15

(...continued)

District of Columbia under section 316, 502, 503, 504, or 505 of title 32 for which the member is entitled to pay from

the United States or for which the member has waived pay from the United States.”

There is some ambiguity about how long this funding and authority would be available under H.R. 3210. Sec. 2 (a)

refers to appropriations for FY2014 being available for “any period [italics added] during which interim or full-year

appropriations for fiscal year 2014 are not in effect.” At the same time, Sec. 3 provides that the appropriations and

authority would be available “until whichever of the following first occurs”: when appropriations are enacted, including

a CR, or January 1, 2015, the end of the first quarter of FY2015; this language suggests that the authority could only be

used once. See CRS Report R41948, Automatic Continuing Resolutions: Background and Overview of Recent

Proposals, by (name redacted).

Memo available from author, Edward Liu.

House Armed Services Committee, Subcommittee on Readiness, “Hearing on Implementation of the Pay Our

Military Act,” October 10, 2013.

CBO, Cost Estimate of H.J.Res. 91, Department of Defense Survivor Benefits Continuing Appropriations

Resolution, 2013, 10-1-013; http://www.cbo.gov/sites/default/files/cbofiles/attachments/hjres91.pdf.

DOD, Deputy Secretary of Defense Ashton, B. Carter, “ Guidance for Continuation of Operations in the Absence of

Available Appropriations,” September 25, 3013, http://www.defense.gov/home/features/2013/0913_govtshutdown/

(continued...)

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The Administration interpreted H.R. 3210 as also permitting the recall of those DOD civilians

“whose responsibilities contribute to the morale, well-being, capabilities and readiness of service

members [italics added]”.16 This revision of DOD’s Contingency Plan would increase the number

of DOD civilians returning to work from roughly 50% to about 95%, according to DOD

Comptroller Robert Hale.17 Under DOD’s revised Contingency Plan reflecting this interpretation

of H.R. 3210, DOD civilians are being recalled from furlough if they:

•

“contribute support to service members and their families on an ongoing basis

[italics added]” (such as health care and family support programs, repair and

maintenance of weapon systems on bases, training associated with readiness,

installation support, commissary, payroll activities, and administrative support);

and

•

“contribute to capabilities and sustaining force readiness and that, if interrupted,

would affect service members’ ability to conduct assigned missions in the future

[italics added]” (such as acquisition program management, depot maintenance,

intelligence, information technology and other administrative support) (see

Appendix B for complete text).18

The services and defense agencies are currently determining how to carry out the revised

guidance. As the services and DOD components implement this decision, civilians will return to

work starting this week and will become eligible to be paid on time under H.R. 3210.

Because H.R. 3210 only covers the pay and allowances of personnel, but not “critical parts and

supplies” necessary to provide that support, Secretary of Defense Chuck Hagel warned that at

some point once current inventories run out, DOD civilians would not be able to do their jobs. At

that point, he would be “forced once again to send them home.”19 It is also possible that

scheduled two-week annual training for reservists could be delayed if the necessary travel and

support are not available.

DOD is continuing to review whether the number of contractor personnel, also covered under

H.R. 3210, will be increased. Expanding the number of contractor personnel covered could be

(...continued)

Guidance-for-Continuation-of-Operations-in-the-Absence-of-Available-App.pdf; also Attachment, DOD,”

Contingency Plan Guidance for Continuation of Essential Operations in the Absence of Available Appropriations,”

September 2013, http://www.defense.gov/home/features/2013/0913_govtshutdown/Contingency-Plan-GuidanceAttachment.pdf; hereinafter, DOD, “Contingency plan memo,” September 25, 2013.

16 DOD, Secretary of Defense, Chuck Hagel, Memorandum for Subject: Components and Defense Agencies,

”Guidance for Implementation of Pay Our Military Act,” October 5, 2013; http://www.defense.gov/pubs/

Memorandum-Pay_Our_Military_Act_Guidance-FINAL.pdf.

DOD, Transcript, Robert Hale, OSD/C, “Press Briefing on the Secretary of Defense’s Interpretation of the Pay Our

Military Act;” October 5, 2013; http://www.defense.gov/Transcripts/Transcript.aspx?TranscriptID=5320. According to

testimony by Robert Hale, DOD Comptroller before the House Armed Services Committee on October 5, 2013, the 5%

or about 40,000 defense civilians who would continue to be furloughed includes 35,000 DOD civilians working for the

Corps of Engineers and the remainder working for the Department of Defense; see Department of Defense, Testimony

of Robert F. Hale, Undersecretary of Defense (Comptroller) before House Armed Services Committee, Subcommittee

on Readiness, “Implementation of the Pay Our Military Act,” October 10, 2013.

DOD, Secretary of Defense, Chuck Hagel, Memorandum for Subject: Components and defense agencies,”Guidance

for Implementation of Pay Our Military Act,” October 5, 2013; http://www.defense.gov/pubs/MemorandumPay_Our_Military_Act_Guidance-FINAL.pdf.

Ibid., p. 4.

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problematic because it could be difficult to determine the amount of monies providing pay, the

funding covered in POMA. Contracts are typically written in terms of the goods or services to be

provided rather than the amount for pay, one element of cost.

The Issue of Retroactive Pay for Civilians

Those defense civilian or contractor personnel who were or remain furloughed would only

receive pay for that period if Congress passes legislation to pay furloughed personnel. Civilians

recalled under POMA will also not be paid for furloughed time in early October unless Congress

chooses to do so.20 On October 5, 2013, the House unanimously passed H.R. 3223, which would

provide retroactive pay for all federal employees, as occurred during the 1995 to 1996 shutdown.

The President has announced his support.21 The Senate has not taken up the bill at this time.

The Issue of Pay for Guard and Reserve Drill Training

On October 3, 2013, the House passed H.R. 3230, Pay Our Guard and Reserve Act, which would

provide appropriations to cover the pay of inactive-duty weekend training reservists in FY2014

until a regular or continuing resolution appropriations act is passed.22 (Reservists performing twoweek annual training are already covered under H.R. 3210.) Although reservists would be paid, it

is not clear how much training would take place because H.R. 3230 does not provide

appropriations to cover related training costs (e.g., fuel, spare parts, food services, and

ammunition). Reservists might be confined to training that did not involve additional expenses

beyond their pay, although DOD might be able to draw on existing stocks or existing contracts to

address these issues at least in the short-term.

This bill is part of a package of five “mini” CRs that would provide funding, generally at the

FY2013-enacted level including the effects of sequestration, for the District of Columbia, the

National Institutes of Health, various museums, Veterans Administration funding, and pay for

guard and reservists. According to press reports, the Senate leadership is not interested in

considering partial funding appropriations of particular agencies, and the White House has issued

a veto threat.23

DOD’s Contingency Plan for a Shutdown

In a September 30, 2013, press conference, DOD Comptroller Robert Hale suggested that while

all military personnel would continue to report for duty, only those reservists, DOD civilians, and

H.R. 3210 provides that the act goes into effect after the Secretary makes a determination of which DOD civilians

and contractor personnel would be covered; see Sec.2 (a)(2) and (3) in H.R. 3210.

OMB, Office of Management and Budget, “Statement of Administration POLICY, “H.R. 3223—Federal Employee

Retroactive Pay Fairness Act (House),” October 4, 2013; http://www.whitehouse.gov/sites/default/files/

omb/legislative/sap/113/saphr3223h_20131004.pdf.

See H.R. 3230 as passed by the House.

CQ News, “Senate Democrats Rebuff ‘Mini CR’ Measures, by Sarah Chacko, CQ Roll Call, Oct. 3,

2013;http://www.cq.com/doc/news-4356141?from=bluebox&pos=bb10. OMB, “Statement of Administration Policy,

H.J. Res. 70, 71, 72, 73 and H.R. 3230 – Limited Appropriations Resolutions, 2014 (Rep. Rogers, R-KY),“ October 2,

2013; http://www.whitehouse.gov/sites/default/files/omb/legislative/sap/113/saphrj70-71-7273_hr3230hr_20131002.pdf.

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contractor personnel providing support for the Afghanistan war and other unspecified military

operations would continue to work. As an example, DOD Comptroller Hale suggested that

civilians providing support for some military operations, such as ships deployed in the

Mediterranean, would be “excepted,” but that civilian personnel supporting other military

activities, such as peacetime training off of Norfolk, would be furloughed. Individual

commanding officers are making these decisions. Comptroller Hale agreed that roughly half of

DOD’s civilian workforce of about 800,000 would be furloughed, as was estimated in 2011

during previous shutdown planning.24

In DOD’s September 23, 2013, memorandum to all its employees, Deputy Secretary of Defense

Ashton B. Carter said that under the department’s plan in the event of a funding lapse, while “all

military personnel would continue in a normal duty status, a large number of our civilian

employees would be temporarily furloughed.”25 Three days later, in a September 26, 2013, memo,

the Deputy Secretary said that “commanders and supervisors will ... provide additional detail

[and] your status under a potential lapse.26 For those activities that are not excepted, personnel

were expected to come in to carry out “orderly shutdown activities” that are expected to take no

more than three or four hours.27

Debate over Interpretation of H.R. 3210, “Pay Our Military Act”

Although the President signed H.R. 3210 on September 30, 2013, the Department of Defense did

not revise its contingency plan until October 5, 2013, after consulting the Department of Justice.

This delay appears to reflect some debate about how to interpret the language in the new law,

which provides appropriations to cover the pay and allowances of those DOD employees who are

currently “excepted” from furlough, hence paying those personnel on time, and gives the

Secretary of Defense authority to bring previously furloughed civilians and contractor personnel

back to work, provided he determines that they are providing support to members of the armed

forces performing active service. Some argued that this latter group could constitute all or nearly

all DOD civilians and contractors.

Initially, Secretary of Defense Hagel indicated that this issue of designating additional groups of

civilians or contractors for return from furlough was under review in the Administration. In an

October 1, 2013, press conference, Secretary of Defense Chuck Hagel said:

Our lawyers are now looking through the law that the president signed, along with the

Department of Justice lawyers and OMB, to see if there’s any margin here or widening in the

interpretation of the law regarding exempt versus non-exempt civilians. Our lawyers believe

that maybe we can expand the exempt status. We don't know if that’s the case, but we are

Department of Defense, Under Secretary of Defense (Comptroller) Robert F. Hale, “News Briefing on the

Department Of Defense’s Plan for a Possible Government Shutdown,” September 27, 2013; http://www.defense.gov/

Transcripts/Transcript.aspx?TranscriptID=5308.

DOD, Memorandum for all Department of Defense Employees, “Guidance for Potential Government Shutdown,”

September 23, 2013.

DOD, Memorandum for all Department of Defense Employees, “Potential Government Shutdown,” September 26,

2013.

OMB, Director Sylvia Burwell, M-13-22, Memorandum for the Heads of Executive Departments and Agencies,

“Planning for Agency Operations during a Potential Lapse in Appropriations,” September 17, 2013,

http://www.whitehouse.gov/sites/default/files/omb/memoranda/2013/m-13-22.pdf.

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exploring that, so that we could cut back from the furloughs some of the civilians that had to

leave.28

That same day, Representative Bud P. McKeon, the Chair of the House Armed Services

Committee, sent a letter to Secretary Hagel arguing that H.R. 3210 provides the Secretary with

“broad latitude” to end the furloughs for DOD civilians.

I believe the legislation provides you with broad latitude and I encourage you to use it. The

text does not limit to provision of pay to civilians who were previously categorized by the

Administration as “excepted” or “essential” for the purposes of Department of Defense

operations in the event of a government shutdown. Therefore, I strongly encourage you to

use the authority Congress has given you to keep national security running, rather than

keeping defense civilians at home when they are authorized to work. 29

The congressional intent of the legislation is not entirely clear.30 In a recent statement,

Representative Mike Coffman, sponsor of H.R. 3210, suggested that H.R. 3210 would protect

“the pay for Department of Defense civilian employees and contractors whose work is essential

for military operations.”31 On October 5, 2013, after several days of consultation, the Department

of Defense made a determination that H.R. 3210 allowed the department to revise its guidance

and recall most of its civilian workforce. The Secretary of Defense has not yet made a

determination of whether to revise its guidance about contractor employees (see “DOD Revises

Its Guidance on Furloughing Certain Civilians”).

Department of Defense, News transcript, “Media Availability with Secretary Hagel on the Government Shutdown”

October 1, 2013; http://www.defense.gov/Transcripts/Transcript.aspx?TranscriptID=5314.

Howard P. “Buck” McKeon, Chairman, House Armed Services Committee, “Letter to Chuck Hagel, Secretary of

Defense, October 1, 2013, http://armedservices.house.gov/index.cfm/2013/10/mckeon-letter-to-hagel-on-pay-ourmilitary-act.

H.R. 3210 was not considered in committee by either house so there are no reports indicating legislative intent.

Congressman Mike Coffman, website,”House Passes Coffman Bill to Keep Military Paid,” http://coffman.house.gov/

index.php?option=com_content&view=article&id=875:house-passes-coffman-bill-to-keep-military-paid&catid=

36:latest-news&Itemid=10.

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Government Shutdown: Operations of the Department of Defense During a Lapse in Appropriations

Debate over Interpretation of H.R. 3210

The language in Section 2(a)(1) of H.R. 3210 provides appropriations to cover the pay and allowances of all members

of the armed forces performing “active service” (“active service” includes both active duty and full-time National

Guard duty) during any period in FY2014 in which interim or full-year appropriations are not available. The language

in Sections 2(a)(2) and 2(a)(3) provides appropriations to cover the pay and allowances of those DOD civilians and

contractor personnel whom the Secretary of Defense determines “are providing support to members of the Armed

Forces described in paragraph (1).”

DOD’s September 25, 2013, contingency plan guidance—which is derived from the laws and policies governing

operations in the absence of appropriations—makes distinctions between the types of activities for which civilian and

contractor personnel would be “excepted” from furlough based on the types of activities being conducted by the

military. For example, while all support for the Afghan war would be provided, support for day-to-day peacetime

training for active-duty military would not necessarily be conducted.

The debate over H.R. 3210 appears to revolve around the extent to which the authority of the bill should be confined

to those civilians and contractors who are already considered “excepted,” or whether the Secretary of Defense

should apply it more broadly to include additional DOD civilian or contractor personnel.

On October 5, 2013, DOD announced that it was adopting the broader interpretation, and substantially modified its

original guidance. The issue of whether to expand the number of contractor personnel remains under review.

Questions About DOD Operations During a Lapse

in Funding

The 2013 DOD guidance, like 2011 guidance, provides that 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. “Excepted” military, reservists, and civilian personnel who

would continue to work during a lapse in appropriations would be paid on time because of the

passage of H.R. 3210. Other furloughed personnel would not be paid, and may be paid

retroactively if Congress chooses to do so once annual appropriations are enacted. This report

provides an overview of recent guidance and precedents over the past 30 years that have

governed planning for DOD operations in the event of a funding lapse, and it discusses their

implications for a shutdown.

Among the questions addressed are

•

the effects of a shutdown on pay for uniformed military personnel and DOD

civilians;

•

how reservists and military technicians may be affected;

•

types of activities to protect persons and property that are “excepted;”

•

potential effects on contracting;

•

whether DOD Dependent Schools or childcare centers would continue to operate

during a shutdown;

•

how long operations of the Defense Finance and Accounting Service could

continue; and

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Government Shutdown: Operations of the Department of Defense During a Lapse in Appropriations

•

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 of these questions are quite simple, others complex, and others uncertain.

Assuming that past Attorney General, OMB guidance, recent DOD guidance, and current new

law are followed in the event of a shutdown, brief answers to these questions are as follows:

•

Pay of Uniformed Military Personnel and DOD Civilians: The current DOD

guidance provides that all active-duty military personnel would be “excepted”

from furloughs during a lapse in funding, as they have been in the past.32 H.R.

3210, the Pay Our Military Act, signed by President Obama on September 30,

2013, provides appropriations to allow the Defense Department to cover the pay

and allowances of members of the armed forces performing active service, and

the DOD civilians and contractors who provide support to them. H.R. 3210

provides this authority through January 1, 2015, or until other regular or

continuing appropriations are enacted.33 This bill means that today’s experience

differs from the previous government shutdown in 1995 and 1996, when this

authority was not provided and DOD was marginally affected by the first short

shutdown and not by the second, longer shutdown because a defense

appropriations bill had been enacted.

•

Potential effects on reservists: DOD’s Contingency Plan specifies that activated

reservists, like active-duty military, would continue to conduct their duties. The

Contingency Plan also specifies that reservists will not perform inactive duty

training (e.g., weekend drills) “except where such training directly supports an

excepted activity” and may not be ordered to active duty (e.g., for annual

training) “except in support of those military operations and activities necessary

for national security, including fulfilling associated pre-deployment

requirements.”34 This would include those reservists currently “training up” for

deployments. H.R. 3210 provides appropriations to cover the pay and allowances

of activated reservists, but would not cover the compensation of any reservists

performing inactive duty training. Under DOD’s Contingency Plan, military

technicians—who are federal civilian employees required to hold membership in

the reserves as a condition of their civilian employment—will continue to

perform their civilian duties only if they are deemed necessary to carry out

excepted activities.

•

National Security and Protection of Life and Property: The 2013 DOD

guidance includes not only military operations in Afghanistan but also some

training and other support necessary for the Afghan war or other military

operations. Excepted military activities are those considered necessary to

“execute planned or contingency operations necessary for national security,”

including “administrative, logistical, medical, and other activities in direct

support of such activities.” Other military activities deemed necessary to carry

DOD, “Contingency plan memo,” September 25, 2013.

H.R. 3210; see also, Roll Call, “President Signs Military Pay Bill,” by Connor O’Brien, September 30, 2013.

DOD, “Contingency plan memo,” September 25, 2013.

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out those operations are recruiting during contingency operations, command,

control, communications, computer, intelligence, surveillance and

reconnaissance. Not listed are depot maintenance repair of equipment or base

support, activities which typically do not involve active-duty personnel.35

Presumably, civilians performing activities not directly required to support

military operations would be furloughed under DOD’s original plan. This plan

was modified with new guidance issued after enactment of H.R. 3210 (see

“Recent Developments”).

•

Contractor Activities: Contracts that rely on previously appropriated funds,

whether for weapon systems with deliveries over several years or support

services where contracts may span fiscal years, would continue. The Defense

Department, however, would only be able to sign new contracts for goods funded

with FY2014 funds for activities deemed necessary to support military

operations, and no monies could be disbursed (checks sent out) under those

contracts. An exception could be any contractor personnel covered by H.R. 3210,

whose support was necessary for military operations, such as contractor

personnel in Afghanistan.36

•

Operation of DOD Dependent Schools and Childcare: The 2013 and 2001

DOD guidance provides that, 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.37 The 2013 guidance also concludes

that child care “essential to readiness” may continue as well as emergency family

support.38

•

Operation of the Defense Finance and Accounting Service (DFAS) and Other

Working Capital Funds: Some DFAS operations would be likely to continue

through a funding lapse, initially using funds drawn from reimbursements from

prior year funds, and then to issue paychecks for those covered under H.R. 3210

(see “Recent Developments”), and to control funds for contracts in support of

excepted activities.39 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.40 Military pensions and other

DOD, “Contingency plan memo,” September 25, 2013.

Department of Defense, Under Secretary of Defense (Comptroller) Robert F. Hale, “News Briefing on the Department Of

Defense’s Plan for a Possible Government Shutdown,” September 27, 2013DOD Contingency plan memo,” September

25, 2013.

Ibid.

Ibid., p. 5 and p. 7.

DOD, “Contingency plan memo,” September 25, 2013. DFAS activities financed through reimbursements from other

appropriations would also continue as long as those funds lasted.

DOD, Transcript, Robert Hale, OSD/C, “Press Briefing on the Secretary of Defense’s Interpretation of the Pay Our

Military Act;” October 5, 2013; http://www.defense.gov/Transcripts/Transcript.aspx?TranscriptID=5320.

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

(continued...)

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retirement benefits are entitlements financed through the military retirement and

health care fund, which is available independently of annual defense

appropriations.

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. The 2013 shutdown guidance provides that

DFAS can make adjustments for prior year unobligated balances, suggesting that some

administration, contract oversight, and auditing functions, some of which are carried out

by DFAS, may also continue.

Many DFAS personnel are paid through reimbursements from other appropriated

accounts for services that DFAS provides to organizations within DOD, and those funds

could be available to support DFAS services to continue national security-related

operations.41 DOD’s 2013 guidance provides that other activities funded through

reimbursements would also continue operations as long as cash was available, recently

estimated as about two weeks, according to DOD Comptroller Robert Hale.42

•

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. While the DOD 2013 guidance mentions the Feed

and Forage Act, use of the Feed and Forage Act during a funding lapse appears

unnecessary during earlier shutdowns, Attorney General and 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.43 Moreover, like the

(...continued)

Security checks even when appropriated funds for the agency lapse. See Opinion by Attorney General Benjamin

Civiletti, January 16, 1981.

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.

DOD, “Contingency plan memo,” September 25, 2013, attachment, p. 8. DOD, Transcript, Robert Hale, OSD/C,

“Press Briefing on the Secretary of Defense’s Interpretation of the Pay Our Military Act;” October 5, 2013;

http://www.defense.gov/Transcripts/Transcript.aspx?TranscriptID=5320.

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

(continued...)

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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.44 While invocation of the Feed and Forage Act during a shutdown is

conceivable, it is not clear what purpose it would serve.45

•

Activities to Protect Health and Safety: The 2013 DOD guidance includes a

broad range of activities under the “safety of persons and protection of property”

category. These activities range from emergency response and intelligence

support to terrorist threat warnings to emergency repair of utilities and associated

equipment, and some counterdrug activities.46

Implications of DOD Guidance

The legal authority for critical military operations to continue is reasonably clear. The 2013

guidance also provides that all other activities needed, in the view of DOD, to support these

“excepted” 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 guidance illustrates, 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 deployment or force generation plans. For example, military personnel preparing to deploy to

Afghanistan would continue. 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

(...continued)

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.

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).”

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.

DOD, “Contingency plan memo,” September 25, 2013.

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the authority to make final judgments on which activities and missions are essential and must be

supported; this could result in inconsistent decisions on what activities may continue and what

must be shut down across the whole force.

Effects on Military, Civilian, and Contractor Personnel

Virtually all military personnel and most civilians are normally paid out of annual appropriations.

With passage of H.R. 3210, funds for all active-duty military, activated reservists, and those DOD

civilian and contractor personnel whose support is necessary for military operations, for other

DOD “excepted” activities, and to support active service personnel will be paid on time despite

the lapse in other appropriations. Other DOD civilian and contractor personnel would not be paid.

DOD is continuing to review the status of many contractor personnel under H.R. 3210.

Reservists performing weekend drills would not report for duty or be paid under DOD guidance

unless Congress decides otherwise at a later time. Furloughed personnel could be subject to

financial hardships if a lapse in appropriations extends past a normal pay date, since no

disbursements may be made. The hardships that a sudden stop in pay would impose on civilian or

contractor 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 those with young families and limited savings, might be affected very badly.

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—for activities deemed essential to support

military operations, but the Antideficiency Act prohibits expenditures or issuing checks for

amounts obligated in advance of appropriations. While contracts for activities necessary to

support military operations could be signed, reimbursements could not be provided and it is not

clear that all vendors would be willing to provide goods or services under these circumstances,

particularly if a shutdown appears likely to continue for an extended period.

Other new contracts, for example, for new weapon system programs or for higher production

rates could be delayed until FY2014 appropriations are enacted if the connection to ongoing

military operations is indirect. There is also likely to be some 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 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.

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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.

Authorities and Conditions Affecting DOD

Operations in the Absence of Appropriations

Based on the 2013 guidance, as well as earlier precedents 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.”47

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

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.

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 are now posted on

OMB’s website or by individual agencies. 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.

Office of Management, Director, “Memorandum for Heads of Executive Departments and Agencies,” Agency

Operations in the Absence of Appropriations,” November 17, 1981, http://www.opm.gov/policy-data-oversight/payleave/furlough-guidance/attachment_a-4.pdf.

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Government Shutdown: Operations of the Department of Defense During a Lapse in Appropriations

Key Department of Justice and OMB Guidance on

Operations During a Lapse in Appropriations48

•

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 Burwell on September

17, 2013, providing further guidance on contracting, grand administration, and payments processing during a

lapse in appropriations.

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 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; and (3) provides selected excerpts from DOD guidance on activities that

may continue during a funding lapse and those that may not.

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, online at http://archive.gao.gov/f0102/114835.pdf. The other

memoranda cited, except for the 2011 and 2013 OMB memos, are available online as appendices to Office of Personnel

Management, “Guidance and Information on Furloughs,” online 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-1322.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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Government Shutdown: Operations of the Department of Defense During a Lapse in Appropriations

The Antideficiency Act

The Antideficiency Act, now codified at 31 U.S.C. 1341 and 1342,49 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

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.

While the Antideficiency Act permits certain exceptions to the requirement that agency operations

cease when appropriations are not provided, 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

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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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 2013 said that “orderly shutdown activities should take no

more than three or four hours following the expiration of funding.”50

•

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

OMB, Director Sylvia Burwell, M-13-22, Memorandum for the Heads of Executive Departments and Agencies,

“Planning for Agency Operations during a Potential Lapse in Appropriations,” September 17, 2013,

http://www.whitehouse.gov/sites/default/files/omb/memoranda/2013/m-13-22.pdf.

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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 understanding 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.51

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

the 2011 and 2013 DOD guidance, however, say that personnel may continue to

administer activities financed with prior year or other available funds that are

necessary to support excepted activities.

•

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.”52 This wording might be read to imply that the authority of agencies

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.

Office of Management, Director, Memorandum for Heads of Executive Departments and Agencies,” Agency

Operations in the Absence of Appropriations,” November 17, 1981, http://www.opm.gov/policy-data-oversight/pay(continued...)

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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.”53

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 to

those:

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 statute “carries with it all means

necessary and proper to carry out properly the purposes of the 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.

(...continued)

leave/furlough-guidance/attachment_a-4.pdf.

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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Appendix A. 2013 DOD Guidance on Operations

During a Lapse of Appropriations

Below are excerpts (in italics) from the September 25, 2013, guidance issued by Deputy Secretary

of Defense Ashton B. Carter, “Guidance for Continuation of Operations in the Absence of

Available Appropriations.” General guidance is followed by a specific list of excepted activities

in an attachment.54

Excerpts from Memorandum

The Department will, of course, continue to prosecute the war in Afghanistan, including

preparation of forces for deployment into that conflict. 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

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.

Excerpts from Attachment: Examples of “Excepted” Activities

Following are excerpts (in italics) from the 2013 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.

DOD, Deputy Secretary of Defense Ashton, B. Carter, “ Guidance for Continuation of Operations in the Absence of

Available Appropriations,” September 25, 3013, http://www.defense.gov/home/features/2013/0913_govtshutdown/

Guidance-for-Continuation-of-Operations-in-the-Absence-of-Available-App.pdf; also Attachment, DOD,”

Contingency Plan Guidance for Continuation of Essential Operations in the Absence of Available Appropriations,”

September 2013, http://www.defense.gov/home/features/2013/0913_govtshutdown/Contingency-Plan-GuidanceAttachment.pdf; hereinafter, DOD, “Contingency plan memo,” September 25, 2013. For general background, see

Shutdown of the Federal Government: Causes, Processes, and Effects, coordinated by (name redacted).

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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.

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.

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.

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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 Security55

•

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)

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

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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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.56

•

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.

•

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

Activities 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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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 Care57

•

Inpatient care in DOD Medical Treatment Facilities and attendant maintenance

of patient medical records.58

•

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.

Contingency planning in medical command headquarters not immediately necessary to support excepted activities is

not an excepted activity.

Elective surgery and other elective procedures in DOD medical and dental facilities are not excepted activities.

Surgery to continue recovery of function/appearance of Wounded Warriors is an excepted activity.

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Education and Training59

•

Education and training necessary to participate in or support excepted activities.

•

DOD Education Activity (DODEA) educational activities.60

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.61

Financial Management

•

Activities necessary to control funds, record new obligations incurred in the

performance of excepted activities, and manage working capital funds.62

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.

DODEA summer school activities are non-excepted activities.

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.

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 Fund63

•

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.

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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Appendix B. DOD, “Guidance for Implementation

of Pay Our Military Act,” October 5, 2013

See below for complete text of DOD guidance to reflect the Administration’s interpretation of the

effects of H.R. 3210, Pay Our Military Act, identifying the number and categories of DOD

civilians to be recalled from furlough.64

SUBJECT: Guidance for Implementation of Pay Our Military Act

Appropriations provided under the Consolidated and Further Continuing Appropriations

Act,2013 (P.L. 113-6) expired at midnight on Monday, September 30, 2013. Hours before that

occurred, the Congress passed and the President signed the Pay Our Military Act. That Act

provides appropriations for specified purposes while interim or full-year appropriations for fiscal

year 2014 are not in effect, as is currently the case.

First, the Act appropriated such sums as are necessary to provide pay and allowances to

members of the Armed Forces, “including reserve components thereof, who perform active

service during such period[.]” This provision provides the Department with the funds necessary

to pay our military members (including Reserve Component members) on active duty or full-time

National Guard duty under Title 32, U.S. Code.

Second, the Act appropriated such sums as are necessary to provide pay and allowances to

contractors of DoD who the Secretary determines are providing support to members of the Armed

Forces in active service. The Department’s lawyers are analyzing what authority is provided by

this provision.

Third, the Act appropriated such sums as are necessary to provide pay and allowances to the

civilian personnel of the Department of Defense “whom the Secretary ... determines are providing

support to members of the Armed Forces” performing active service during such period. The

term “pay and allowances” includes annual leave and sick leave.

This Memorandum provides instructions for identifying those civilian personnel within the

Department who “are providing support to members of the Armed Forces” within the meaning of

the Act. The responsibility for determining which employees fall within the scope of this statute

resides with the Military Department Secretaries and Heads of other DoD Components, who may

delegate this authority in writing. This guidance must be used in identifying these employees. The

guidance does not identify every activity performed by DoD’s large civilian workforce, but rather

it provides overarching direction and general principles for making these determinations. It

should be applied prudently, and in a manner that promotes consistency across the Department.

The Department of Defense consulted closely with the Department of Justice, which expressed its

view that the law does not permit a blanket recall of all civilians. Under our current reading of

the law, the standard of "support to members of the Armed Forces” requires a focus on those

employees whose responsibilities contribute to the morale, well-being, capabilities, and readiness

DOD, Secretary of Defense, Chuck Hagel, Memorandum for Subject: Components and defense agencies,” Guidance

for Implementation of Pay Our Military Act,” October 5, 2013; http://www.defense.gov/pubs/MemorandumPay_Our_Military_Act_Guidance-FINAL.pdf.

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of covered military members during the lapse of appropriations. I have determined that this

standard includes all those who are performing activities deemed “excepted” pursuant to the

“CONTINGENCY PLAN GUIDANCE FOR CONTINUATION OF ESSENTIAL OPERATIONS IN

THE ABSENCE OF AVAILABLE APPROPRIATIONS, SEPTEMBER 2013” because these

support activities are felt directly by covered members of the Armed Forces. I want to make it

clear that every DoD employee makes an essential contribution to the Department’s ability to

carry out its mission of defending the Nation. However, under this Act, we must determine who

provides support to the members of the Armed Forces in active service, in a way that respects

Congress’s specific appropriation.

There are two distinct categories of civilian employees who fall within the scope of this statutory

provision, in addition to those performing excepted activities. The first category includes those

employees whose responsibilities provide support to service members performing active service

and their families on an ongoing basis. The second category consists of those employees whose

responsibilities contribute to sustaining capabilities and Force Readiness and which, if

interrupted by the lapse in appropriations, will impact service members’ ability to conduct

assigned missions in the future. To fall within this second category, there must be a causal

connection between the failure to perform the activity during the duration of an appropriations

lapse and a negative impact on military members in the future. In other words, if the activity is

not performed over the duration of an appropriations lapse, would it be possible to identify a

negative impact that will be felt by military members at some time in the future? In undertaking

this analysis, it should be assumed that regular appropriations will be restored within the near

term.

Examples of activities that provide support to service members on an ongoing basis are:

i) Health Care Activities and Providers;

ii) SAPRO, Behavioral Health, and Suicide Prevention Programs;

iii) Transition Assistance Programs for Military Members in active service;

iv) Family Support Programs and Activities;

v) Activities related to the repair and maintenance of weapons systems and platforms at the

Operational and Intermediate level;

vi) Training Activities associated with military readiness;

vii) Supply Chain Management activities in support of near term Force Readiness;

viii) Human Resource Activities associated with organizing, equipping, manning and training

functions;

ix) Installation Support and Facilities maintenance;

x) Commissary operations;

xi) Payroll activities;

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xii) The provision of guidance or advice to military members when such guidance or advice is

necessary for the military members to execute their functions (e.g., legal advice); and

xiii) Necessary support for all activities listed above, including legal, human resources,

engineering, and administrative support.

Examples of activities that contribute to capabilities and sustaining force readiness and that, if

interrupted, would affect service members’ ability to conduct assigned missions in the future

include:

i) Acquisition Program oversight and management (including inspections and acceptance),

financial management, contract, logistics, and engineering activities, which support long term

readiness;

ii) Activities related to the repair and maintenance of weapons systems and platforms at the

Depot level;

iii) Supply chain management activities in support of long-term force readiness;

iv) Intelligence functions;

v) Information Technology functions; and

vi) Necessary support for all activities listed above determined to be within the scope of the Act,

including legal, human resources, engineering, and administrative support.

Employees performing these activities are within the scope of the Act only if a delay in the

performance of these activities over the duration of a lapse in appropriations would have a

negative impact on members of the Armed Forces in the future. Delays in the availability of new

or repaired equipment would be one such impact.

Those employees of the Department who do not fall within the scope of the Act (unless they have

been determined to be “excepted” and unless engaged in activities that support service members)

include:

i) CIO functions;

ii) DCMO functions, at the OSD and Component level;

iii) Legislative Affairs and Public Affairs functions not previously excepted or required

in support of internal communications to members ofthe Armed Forces in active service;

iv) Auditor and related functions, not previously excepted, and DF AS functions that otherwise

would not be determined to be “excepted” upon exhaustion of its working capital fund budgetary

resources, and not required to process payrolls;

v) Work done in support of non-DoD activities and Agencies (except the U.S. Coast Guard); and

vi) Civil works functions of the Department of Army.

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As I stated above, all DoD employees perform work that is critical to the long-term strength of

our Armed Forces, and our Nation. I fervently hope that the time will be short until I can recall

all employees of the Department of Defense back to the vital work that they do helping to defend

this Nation and secure our future. I will continue to explore all possibilities to this end. Those

falling outside the scope of the Act include men and women who have devoted their lives to

service of this country, and whose work on our behalf and on behalf of the Nation is enormously

valuable and critical to the maintenance of our military superiority over the long term.

The Act provides appropriations for personnel; it does not provide appropriations for equipment,

supplies, materiel, and all the other things that the Department needs to keep operating

efficiently. While the Act permits the Department to bring many of its civilian employees back to

work, and to pay them, if the lapse of appropriations continues, many of these workers will cease

to be able to do their jobs. Critical parts, or supplies, will run out, and there will be limited

authority for the Department to purchase more. If there comes a time that workers are unable to

do their work, I will be forced once again to send them home.

Within the Office of the Secretary of Defense, the Under Secretary of Defense (Comptroller) will

take the lead in overseeing the implementation of this guidance, assisted by other offices as

necessary. Thank you all for your strong leadership at a very difficult time. The President, the

country and I are all grateful for and depend on your leadership, courage, and commitment to

our troops, their families and our country.

cc:

Director of National Intelligence

Author Contact Information

(name redacted)

Specialist in U.S. Defense Policy and Budget

[redacted]@crs.loc.gov, 7-....

(name redacted)

Specialist in U.S. Defense Policy and Budget

[redacted]@crs.loc.gov, 7-....

Acknowledgments

The authors would like to acknowledge the help of Edward Liu, American Law Division, and (name red

acted), Foreign Affairs, Defense and Trade Division, CRS.

Congressional Research Service

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