AWUSACE

You will not find it stated in any official policy or regulation. I cannot speak for the other services, but HQDA and OGC made the determination that the MILCON requirement (along with the requirements for work classification, $750K OMA threshold, etc.) for CIPs under UP do not apply, because the utility infrastructure is no longer real property.

It was decided by DoD, that the laws (10 USC 169 and 159) that pertain to real property and drive the MILCON requirement were not applicable to utility privatization (UP), because the utility infrastructure has been transferred to the UP provider via a bill of sale and is no longer GOVT property. Based on this, it was determined annual appropriations were permissible for all CIPs.

Under utility privatization (10 U.S.C § 2688), would funding a capitol improvement project (CIP) with annual appropriations in one FY and the project isn’t completed until the next FY be a violation of the Bona Fide Needs Rule?

Please read 41.202 Procedures prior to executing a sole source utility service contract. It mentions that the KO shall comply with Parts 6 and 7 and Subsections 41.201 (d) and (e), and you must conduct market surveys and aquisition planning as well.

OK. I’m back to my initial question (if you or anyone else would like to try and answer) is a Congressional exception required to be added to 10 U.S.C. § 2688 to grant DOD authority to cross fiscal years for severable items with appropriated funds for UP contracts? Several of my colleagues contend that such an exception is required even though at present we are currently handling the annual funding and crossing of fiscal years for these UP contracts in compliance with the rules under 10 U.S.C. § 2410a. Thoughts/comments?

Navy_Contracting_4 - for the benefit of my colleagues can you please clarify further why exactly you would not need a Congressional exception added to 10 U.S.C. § 2688 to grant DOD authority to cross fiscal years for severable items with appropriated funds for UP contracts? My colleagues contend that all funding from Congress is limited to use during the period identified in the respective appropriations and the Executive branch cannot deviate from these time limits without express statutory authority from Congress. They further contend that 10 U.S.C. § 2688 does not create any exception which grants DOD the ability to ignore Congressionally-mandated appropriations limits.

Excellent point Navy_Contracting_4 and makes perfect sense from a legal/contractual perspective. Thank you!!!

I have a question regarding utility privatization (UP) contracts meeting the conditions placed in the 10 U.S.C. § 2410a exception? 10 U.S.C. § 2410a permits the express exception only for severable service contracts with a period no longer than one year. UP contracts, at up to 50 years in length (10 U.S.C § 2688), far exceed this one year limitation.