What a Full-Year CR Means for Technology Companies
Author: Abbey Woomer
On March 15, 2025, President Trump signed a full-year Continuing Resolution (CR) into law for Fiscal Year (FY) 2025, a move that significantly impacts various sectors, including technology companies. This legislation funds the government at FY24 enacted levels through September 30, 2025, accompanied by notable increases in defense spending and reductions in non-defense allocations. For technology companies working with or adjacent to government programs, this CR brings both opportunities and challenges.
This blog will break down the key components of the FY25 full-year Continuing Resolution and explore its impact on technology companies. You’ll also discover actionable insights on navigating the shifting government spending landscape.
Breaking Down the FY25 CR
The Continuing Resolution introduces critical changes in government funding and spending authority for FY25. Here's a closer look at its key provisions and their implications for the technology sector:
Defense Spending Increase and Non-Defense Reductions
The FY25 CR increases defense spending by $6 billion while reducing non-defense allocations by $13 billion. This shift highlights the government’s growing focus on national security and technological superiority. For tech companies specializing in defense-related innovations such as artificial intelligence (AI), cybersecurity, and advanced manufacturing, this is a clear sign of where opportunities may lie.
However, non-defense technology providers may find the reduced funding challenging. These companies should pay careful attention to agency-specific funding within the CR to tailor their pitches accordingly.
New Start Allowances for DOD and Non-Defense Agencies
The legislation permits both defense and non-defense agencies to initiate "New Starts" under certain conditions:
Department of Defense (DOD): DOD is granted conditional authority to start new programs as long as they align with FY25 House and Senate appropriations bills. This flexibility provides room for expanded defense technology projects, including innovations in emerging technologies such as unmanned systems, quantum computing, and AI-powered tools.
Non-Defense Agencies: New Starts are allowed for non-defense projects unless explicitly disallowed in FY25 appropriations legislation. This creates a slim but strategic opportunity for non-defense technology companies to position themselves as contributors to civic innovation, healthcare IT, or federal digital infrastructure projects.
For technology firms, these New Starts provide an opening to present their solutions as critical to agency missions. If aligned with strategic federal priorities, these projects can expedite partnerships with government entities.
Increased Spending and Reprogramming Authority for DOD
The CR introduces two pivotal changes to how the Department of Defense can allocate its FY25 budget:
Forty percent of FY25 DOD funding can now be spent during the last two months of the fiscal year, up from twenty percent.
DOD's authority to reprogram funding for emerging technologies has risen from $6 billion to $8 billion.
These changes emphasize a stronger push toward deploying advanced tech solutions in defense initiatives. Technology firms with capabilities in cutting-edge areas like autonomous vehicles, secure 5G, and augmented reality (AR) training tools have a prime opportunity to secure contracts and funding during this period.
The Path Forward for Federal Budget Oversight
With the passing of the year-long CR, Congress is setting its sights on the FY26 budget process. While there’s no official release date, President Trump is anticipated to submit his FY26 Budget Request to Congress in April or May 2025.
However, the FY26 budget process is shaping up to be complex due to two major factors:
Reduced Congressional Appropriator Power: House and Senate appropriators face diminished influence due to the Trump Administration’s intention to utilize impoundment authority, which redirects congressional spending priorities.
DOGE-Driven Budget Cuts: Codified budget cuts threaten to further tighten spending in non-defense areas, prompting agencies to focus heavily on efficiency while curbing discretionary spending.
For technology companies, this means an uncertain but opportunity-rich environment. Agencies will need scalable, high-efficiency technology solutions to meet their objectives within tighter budgets. Positioning your products as cost-effective, future-ready options can help build demand despite fiscal constraints.
What This Means for Technology Companies
Navigating government spending under a CR requires careful strategy, especially for technology firms attempting to win contracts or expand their presence in federal markets.
Why Technology Companies Should Stay Engaged
One misconception among businesses is that a Continuing Resolution freezes all opportunities. While it’s true that CRs create limitations in government spending, it’s also true that once appropriations bills are passed, agencies face tight deadlines to spend their funds and launch new initiatives. This "spend-or-lose-it" dynamic makes preparation and persistence crucial.
Here’s how technology companies can adapt and thrive:
Continue Sales and Marketing Efforts: Maintain visibility with federal clients, even during CR periods. This ensures your company is top-of-mind when funding is released.
Focus on Emerging Technologies: Recognize the government’s prioritization of emerging tech sectors like AI, quantum computing, and cloud infrastructure. Tailor your offerings to align with these focus areas.
Leverage Existing Relationships: Strengthen partnerships with federal agencies and contractors to position yourselves as trusted collaborators for upcoming New Starts.
Highlight ROI and Cost Efficiency: Agencies will prioritize solutions that deliver a high return on investment while operating within constrained budgets.
Explore Opportunities in Emerging Areas
The increased defense spending and funding for New Starts show a clear demand for innovation in certain areas. Technology companies specializing in the following sectors are well-positioned to benefit:
Cybersecurity solutions for critical infrastructure.
AI-driven tools for better decision-making and optimization.
Cloud services and edge computing for operational efficiency in both defense and non-defense environments.
Digital transformation tools that reduce friction and improve citizen services.
Seize the Opportunity Ahead
The FY25 full-year Continuing Resolution opens distinct opportunities for technology companies. While the limitations of a CR may seem restrictive at first glance, the increased defense funding, loosened restrictions on New Starts, and urgency to spend budgets once appropriations bills are passed all play in favor of those prepared to act swiftly.
To maximize your success, stay engaged with government agencies, align your offerings with their evolving priorities, and position your business as a driver of efficiency and innovation. The long-term gains for companies that can secure contracts and establish relationships during this critical fiscal period are significant.
Are you ready to position your company for success? Stay connected, refine your strategy, and act now to ensure you’re at the forefront when new opportunities open up.