State Department Procurement Guidance During Appropriations Lapse

Senior Procurement Executive Message to the Department of State Contractor and Financial Assistance Community on the Lapse in Appropriations As the Department’s Senior Procurement Executive, I am reaching out to share guidance due to the lapse in appropriations that occurred on January 31, 2026.

This guidance relates to the handling of Department contract and federal assistance (grants) awards that is consistent with Department and Office of Management and Budget’s Guidance on Operations During a Lapse in Appropriations. The Antideficiency Act prohibits agencies from incurring obligations that are in advance of, or that exceed, an appropriation, with certain limited exceptions.

As you are aware, a full fiscal year 2026 appropriation is not yet enacted for the Department of State. For many Department accounts, this results in a lapse in funds designated to purchase certain supplies and services and issue grants and reduces the Department’s capacity to provide oversight on contracts and grants.

As a result, certain planned procurements and grants may be cancelled, or postponed, and certain existing contracts and grants may be stopped, suspended, reduced in scope, or terminated. Additionally, payments may be delayed.

If the lapse directly affects a contract or grant, on or about January 31, 2026, the Department’s contracting officers and grant officers will notify contractors and grantees of the status of their contract or grant. If a contract or grant will not be affected at the onset of the lapse in appropriations, the Department does not plan to provide any separate notifications or communications of that fact.

Unless the contracting officer or grants officer provides a formal notification to the contrary, all Department contractors and grantees must continue to comply with all terms, conditions, requirements and deliveries specified in their contracts or grants.

Once an extension to the Continuing Resolution or full-year appropriation is signed into law, the Department will begin implementing the plan to orderly resume activity and will notify contractors at that time. Thank you for your continued partnership with the Department, and for your cooperation as we work together to manage this lapse in appropriations.