I would like to find out about the issues of procuring training vouchers. We have had a great deal of discussion about them here. Some feel it is an illegal use of advanced payments, others paying for services before they are received. FAR does not help, it there any policy on them?

By nutothis on Thursday, September 27, 2001 - 05:10 pm:

Steve: Please give more info on training vouchers.  When where and how are they procured?

By Anonymous on Friday, September 28, 2001 - 08:35 am:

Unless I miss my guess try FAR 12.210 and then check out part 32....this is doable.

By formerfed on Friday, September 28, 2001 - 01:21 pm:

If you mean buying vouchers from a company for future training, this concept poses difficulties for a lot of the financial/CFO types. I know some agencies do this on a regular basis. On the other hand, several of the more knowledgeable CFO's won't allow it. Not only do they consider it as advance payments (without the necessary prior approvals), but the larger and tougher area seems to be specific courses aren't identified up front. In essence, the government is prepaying for employees to take undefined courses in the future. I'm aware some training companies offer large discounts using this method. However I wouldn't want to be the responsible individual for prepaying lots of training and the company goes bankrupt. I would ask your lawyers and CFO for an opinion.

By Steve W. on Friday, September 28, 2001 - 04:19 pm:

Further info for NUTOTHIS: Training vouchers would be procured using FFP task order. This would provide X days training, with vouchers redeemable at vendor training center. They are good for one year, and are prepaid as the name implies. I have been told that there is some training policy directly addressing vouchers but so far can find nothing.

By Joe Scarpa on Friday, September 28, 2001 - 04:21 pm:

You might enjoy http://www.opm.gov/hrd/lead/handbook/lrbsa8.htm#advancepayment (I do not have access to 41 Comp. Gen. 626 (1962) cited there).

Title 5, Sec. 4109. Expenses of training
(a) (2) The head of an agency, under the regulations prescribed under section 4118(a)(8) of this title and from appropriations or other funds available to the agency, may pay, or reimburse the employee for, all or a part of the necessary expenses of the training, without regard to section 3324(a) and (b) of title 31 [see excerpt below], including among the expenses the necessary costs of -
'snip'
(C) tuition and matriculation fees;
(D) library and laboratory services;
(E) purchase or rental of books, materials, and supplies; and
(F) other services or facilities directly related to the training of the employee.

Title 31 USC 3324 - Advances
(a) Except as provided in this section, a payment under a contract to provide a service or deliver an article for the United States Government may not be more than the value of the service already provided or the article already delivered.
(b) An advance of public money may be made only if it is authorized by -
(1) a specific appropriation or other law; ….

--------------------------------------------------------------------------

The FAR definition of "advance payments" is provided in Subpart 32.102 Non-Commercial Item Purchase Financing.

The FAR definition of "commercial advance payment" is at 32.202-2, Types of payments for commercial item purchases, and limits advance payments to 15% of the aggregate amount, but see 32.202-1(b) Policy - Authorization: "Commercial interim payments and commercial advance payments may be made under the following circumstances--
(1) The contract item financed is a commercial supply or service;
(2) The contract price exceeds the simplified acquisition threshold…."
---------------------------------------------------------------------------------------
Subpart 32.4--Advance Payments for Non-Commercial Items [Not applicable to Part 12 procurements]
32.401 Statutory authority.
The agency may authorize advance payments in negotiated and sealed bid contracts if the action is appropriate under--
(a) Section 305 of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 255);
(b) The Armed Services Procurement Act (10 U.S.C. 2307);

10 USC Sec. 2307. Contract financing
(a) Payment Authority. - The head of any agency may -
(1) make advance, partial, progress, or other payments under contracts for property or services made by the agency; and
(2) insert in solicitations for procurement of property or services a provision limiting to small business concerns advance or progress payments.

[See 41 USC 255 for civilian contracting.]

32.403 Applicability.
Advance payments may be considered useful and appropriate for the following:
'snip'
(g) Contracts with small business concerns, under which circumstances that make advance payments appropriate often occur (but see 32.104(b)[which reads:"If the contractor is a small business concern, the contracting officer must give special attention to meeting the contractor's contract financing need. However, a contractor's receipt of a certificate of competency from the Small Business Administration has no bearing on the contractor's need for or entitlement to contract financing.]).
(h) Contracts under which exceptional circumstances make advance payments the most advantageous contract financing method for both the Government and the contractor.
32.404 Exclusions.
(a) This subpart does not apply to advance payments authorized by law for--
'snip'
(2) Tuition;
'snip'
(6) Subscriptions to publications;

---------------------------------------------------------------------------------------
Training services--or publications--that could be purchased via vouchers would presumably be considered a commercial item, generally priced between the micro-purchase threshold and the simplified acquisition threshold (or $5,000,000 for acquisitions of commercial items using Subpart 13.5), and hence, subject to Part 12.

FAR 13.000 states: "See Part 12 for policies applicable to the acquisition of commercial items exceeding the micro-purchase threshold."

FAR 13.003(b)(1) requires each acquisition of supplies or services that has an anticipated dollar value exceeding $2,500 and not exceeding $100,000 is reserved exclusively for small business concerns and shall be set aside ….

FAR 13.003(g) Authorized individuals shall make purchases in the simplified manner that is most suitable, efficient, and economical based on the circumstances of each acquisition. For acquisitions not expected to exceed--
(1) The simplified acquisition threshold for other than commercial items, use any appropriate combination of the procedures in Parts 13, 14, 15, 35, or 36, including the use of Standard Form 1442, Solicitation, Offer, and Award (Construction, Alteration, or Repair), for construction contracts (see 36.701(b)); or
(2) $5 million for commercial items, use any appropriate combination of the procedures in Parts 12, 13, 14, and 15 (see paragraph (d) of this section).

FAR 13.003(h)(4) In addition to other considerations, contracting officers shall use innovative approaches, to the maximum extent practicable, in awarding contracts using simplified acquisition procedures.

FAR 13.101(a)(1) In making purchases, contracting officers shall comply with the policy in 7.202 relating to economic purchase quantities, when practicable….

FAR 7.202(a)(1) Agencies are required by 10 U.S.C. 2384(a) and 41 U.S.C. 253f to procure supplies in such quantity as will result in the total cost and unit cost most advantageous to the Government, where practicable…
[Title 10 Section 101(a)(14): The term ''supplies'' includes material, equipment, and stores of all kinds.]

-----------------------------------------------------------------------------

FAR 1.102-4(e) ... If a policy or procedure, or a particular strategy or practice, is in the best interest of the Government and is not specifically addressed in the FAR, nor prohibited by law (statute or case law), Executive order or other regulation, Government members of the Team should not assume it is prohibited. Rather, absence of direction should be interpreted as permitting the Team to innovate and use sound business judgment that is otherwise consistent with law and within the limits of their authority. Contracting officers should take the lead in encouraging business process innovations and ensuring that business decisions are sound.

I submit that--assuming a significant discount attainable through the purchase of training vouchers/packages in an economic order quantity (and useable within a reasonable period)--those proposing for the "best interest of the Government" have a stronger case than those wary of the proscription on advance payments.

At the very least, recommend submit a request for approval of training package vouchers to the agency head, pursuant to 10 USC 2307 or 41 USC 255.

(The Navy delegates such approval authority in NAPS 5232.402(e) - All delegations of authority with respect to advance payments under 10 U.S.C. 2307 conferred upon the Secretary of the Navy have been delegated to the ASN(FM&C). This authority has been redelegated to the Director, Office of Financial Operations, OASN(FM&C), who will make the necessary determinations and findings and approve contract terms concerning advance payments. Requests for advance payments shall be submitted via ABM.)

Good luck and Happy New Year!!!