mtbyrne76

My agency procedures call for securing a PR prior to issuance of a change. However, my point is that the funds obligated for the original contract are properly used for changes within scope and to fund variations permitted by the VEQ clause. No further funding certification is required at the time of the obligation. Unfortunately, our government procedures often get in the way of correctly administering the contract. If fund certification wasn't so bogged down by bureaucratic procedures (my agency in particular) then it would be good business practice to secure funds for the increase at the time. However, it isn't required. Again, my examples are specific to firm fixed price construction contracts, but the principle is sound. Not giving timely CO direction, ultimately resulting in a delay cost, is not good business practice either and the same as obligating the governments money to pay for the cost of the delay.

Yes.

Vern/Joel, With all due respect, it seems as though you may be placing unprecedented priority on FAR 43.105 - Availability of Funds, over the Changes and other clauses of the regulation. Particularly in firm fixed price construction contracts, which contain the limitation of funds and variation in estimated quantity clauses. As ji20874 has stated, the clause addresses certification of fund availability prior to executing a modification only. The clause does not discuss providing direction, instruction, or interpretation, or determination. In many instances, the CO may provide direction without a modification "...written or oral order (which, as used in this paragraph b, includes direction, instruction, interpretation, or determination) from the CO that causes a change shall be treated as a change order..." under the Changes Clause, "...provided that the contractor provide written notice that they regard the order as a change order." The work is often already performed and then a modification is executed later or the contractor does not constitute the direction as a change. In addition, there are many instances when a contractor may perform contract work as described in the drawings and/or specifications and as permitted by the variation in estimated quantity clause that causes an increase in funds to the contract which is modified at a later date. The existing contract funds may be used to provide progress payments for this work and the contract modified to add funds at a later date or other work may be removed from the scope of the contract altogether. It is prudent and good business practice to obtain certification of funds which obligates additional funding to the project to cover an increase and to avoid an insufficiency of funds on a contract at the time of the action. However, it is not necessary for work that is within scope and or prior to the CO providing direction, clarification, instruction, and/or determination. Vern's statement that "It is not good business practice to issue a change order without recording an obligation at the time of issuance, because (1) GAO says it's contrary to law and (2) it could result in an ADA violation. However, it would not surprise me to learn that some COs do not do so, since many COs are clueless about appropriations law." isn't fair to ji20874, is not realistic, and not accurate. In my experience, this strict interpretation of FAR 43.105, as it relates to providing CO direction, seems to stem from a misunderstanding and/or fear of violating the Anti-Deficiency Act. However, as the CO, providing direction under the terms of the contract is not likely to be a violation of the ADA, even if an insufficiency occurs, as long as the government has properly entered into a contract using appropriated funds intended for that purpose. This includes contract modifications and contingent or indefinite liabilities. In fact, the GAO seems to agree as referenced in Formation of Government Contracts, Third Edition, Page 54 - 57, specifically as follows: "Generally, contract modifications that are found to be within the scope of the original contract are considered bona fide needs of the fiscal year when the original contract was made. Thus, the funds used on the original contract have been properly used to fund changes issued under the Changes clause, 23 Comp. Gen. 943 (B-41903) (1944)..." and continuing with "This rule is premised on the theory that these clauses do not create new liabilities but simply make existing ones certain." and finally "A strict interpretation of the Anti-Deficiency Act would require agencies to obligate an amount sufficient to cover the total possible liability. However, neither the Comptroller General nor the House Committee on Appropriations has read the Act so strictly. See 34 Comp. Gen. 418 (B-121982) (1955) permitting a substantial amount of flexibility in determining the amount to be recorded as obligations for contracts involving liabilities that are indefinite in amount." Therefore, ji20874 response is perfectly acceptable, legal, has precedence and in most Government agencies, the only timely mechanism for providing timely direction to the contractor. Currently, in my agency, the approval of new funds ("certification") is between 1 week and two months. Surely, you do not suggest that the Government reject a contractor's invoice for contract quantities that have been verified to be installed and are in excess of the estimated quantity, until certification of availability of funds and execution of a contract modification? Or risk delaying the contractor during an important government power outage or water delivery that has a limited window, at the risk of have to extend the contract the following year because you haven't certified that funds are available? Where is our responsibility for acting timely and diligently pursuing our contractual commitments? Respectfully,