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Showing results for tags 'bonafide need'.
I'm working on a large dollar Advisory and Assistance Contract that is about to be transferred from DHS to USDA. Congressional approval was granted for DHS to transfer funds to USDA, These funds are FY18 two year funds which we anticipate receiving around August/September. I know we have until end of FY19 to get these funds obligated before they expire but what I'm trying to figure out is how long the funds remain useable. When using annual appropriations, bonafide need allows one year from date of obligation to use the funds (crossing fiscal years) unless we are purchasing a non-severable service. We believe the services would be severable so would we still be limited to one year from obligation to use the funds. Really wish I still hand my CON090 Time, purpose, color of money slides. I've been looking through the redbook but coming up short. In my career I've only ever used annual appropriations and no-year funds.
I awarded a ID/IQ contract to three contractors in February '15. We have awarded task orders to two of the three contractors to satisfy the minimum, however, based on the forecast, it is possible that the third contractor might not have the minimum satisfied in the current fiscal year (15/16). To determine our next steps, there have been multiple discussions between contracting officers, legal and branch chiefs. I am a new contracting officer and this is the first task order contract I have administered. I suggested using the fair opportunity exception at FAR 16.505 (b ) (2)(i)(D) to sole source a TO in order to satisfy the minimum. My team leader reviewed my stance and responded as follows: "Seems to me your options are limited. Because the awards were made in FY 15 the Bonafide Need rule requires that the funds available at the time of award FY 15/16 being retained under each contract (whether on the contract or task order). The issue at hand is one of the Agency getting use out of its obligated funds and should be distinguished from a case of needing to satisfy our minimum commitment to the contractor (which does not arise until the ordering period expiries. 1. Satisfying our Appropriation Rule on Bonafide Need We need to maintain 15/16 funding under each contract, whether under the contract itself of under an issued TO that may extend beyond the funds availability for obligation, but will be supportive of the BN at the time of issuance. TO with performance periods stretching beyond the availability of FY 15/16 funds while this appropriation is available would preserve the BN supporting the underlying contract. If we issue a TO using 16/17 funds, we would meet our contractual obligation to the contract holder, but we would still have to keep the funds obligated at award (15/16 funds) on the contracts and to do so otherwise would result in a violation of the BNR, as we would have failed to support the BN for what the contract was procuring. " Legal went further to state: A sole source task order under the exception to FAR 16.505 (b )(2)(i)(D) cannot be issued. The contract POP is 5 years. Therefore, approximately 4 years remain of the POP, while approximately 7 months remain prior to the end of the fiscal year. Consequently, there is enough time for the contract holder in question to receive additional competitive task order awards sufficient to liquidate the balance of the minimum amount obligated to the contract at the time of the award. Neither the FAR guidance nor any of the clauses included in the contract provide for an exception to the "fair opportunity to compete" for task orders that would facilitate the reduction of the outstanding minimum balance and avoid the expiration of the FY funds placed on the contract at the time of award. Furthermore, failure to issue a task order to the contractor in question under which 15/16 funds can be used, does not mean the money is "lost" per se, What it does mean is that , if the Agency does not issue any task orders to the contract holder in question between now and the end of the ordering period, those FY 15/16 funds will still be available to liquidate whatever portion of the minimum is due and owing to the contract holder in question. As to how that amount is calculated, I direct your attention to the CAFC case White v. Delta Construction International, Inc., 285 F.3d 1040. What that means is: The contractor in question would only be due payment of an amount that reflected the delta between the costs it would have incurred had the minimum amount been satisfied in total, given indirect costs and profit. So. I have two questions: 1. How does White V. Delta overrule the Government from fulfilling its obligation under 52.216-22? 2. Why would the use of the fair opportunity exception at FAR 16.505( b ) (2) (i)(D) to sole source a TO in order to satisfy the minimum not apply? I would think the potential to violate the BNR would be even more of a reason to sole source.
I'm an Army 1102 tasked with awarding a modification to a services contract that affects price. I've encountered a bit of a funding dilemma and I'd appreciate anyone's input on this. My interpretation of the circumstances and the pertinent statutes/regs/rules/etc is that if the KO determines this modification is in-scope then the obligation must utilize award year money. Conversely if the KO determines that the mod is out-of-scope, then current year funds may be utilized--but there must also be a J&A documenting why the work isn't newly competed. There are differing opinions. Any thoughts? CONTRACT DETAILS: The contract is firm fixed price for commercial, "severable" type services for a military customer. It was competitively awarded. The contract's period of performance is one base year (9/2012-9/2013) plus one option year (9/2013-9/2014) in the total amount of ~$10M (incl base + option). The base contract was awarded in Sept 2012, obligated with FY12 O&M funds. The option exercise for the additional year was exercised in Sept 2013, obligated with FY13 O&M funds. MOD DETAILS: The mod is for new, additional work. Whether this work is in-scope or out-of-scope is still under debate. It's definitely related to the work in the original PWS but I personally I believe it's outside the scope (under the criteria cardinal change rule, material change, etc.). The contractor has proposed ~$200k for the mod. Currently, the funds provided are split 75/25 among FY14 and FY13 funds. PERTINENT REGS, RULES, ETC.: The following references have been consulted. FAR Subpart 32.7, Contract Funding - 32.703 provides statues that permits agency heads to fund contracts crossing fiscal years with annual appropriations DFARS 32.7, Contract Funding - 232.703-3 provides 10 USC 2410a as the applicable statute. FAR Part 43 Modifications - silent on the topic DFARS Part 43 Modifications - silent on the topic FAR Part 6 - 6.001 states CICA requirements apply to mods not within the scope of the original contract 2013 FISCAL Law Deskbook - Ch. 3, Sect. VII Use of Expired Funds, Paragraph B Contract Modifications Affecting Price: Subparagraph 1(a) "When a contract modification does not represent a new requirement or liability, but instead only modifies the amount of the government’s preexisting liability, then such a price adjustment is a bona fide need of the same year in which funds were obligated for the original contract." - I.E. IN-SCOPE mods mut use award year funds Subparagraph 1(b )(1) “In general, increases to the quantity of items to be delivered on a contract are viewed as outside the scope of most changes clauses. Thus, a modification to increase quantity will amount to a new obligation chargeable to funds current at the time the modification is made.” - I.E. OUT-OF-SCOPE mod can use current year funds but this would require a J&A IAW FAR 6.3 Subparagraph 1(b )(5) “Severable Services: A modification providing for increased additional deliverable services must be charged to the fiscal year or years in which the services are rendered… Note: In dicta, GAO has suggested that an increased services modification to a contract awarded for 12 months under 2410a would relate back to the funds initially placed on the contract. See GAO Redbook, Volume I,Appropriations Law, page 5-34 (2008). - I.E. this is a gray area but it appears GAO rules that OUT-OF-SCOPE mods for severable services also require award year funds GAO Redbook - Volume I, Appropriations Law, Sect 9a (page 5-44) “10 U.S.C. § 2410a authorizes the military departments to use current fiscal year appropriations to finance severable service contracts into the next fiscal year for a total period not to exceed 1 year” - I.E. the Redbook explains the intent behind the DoD Severable Services permission but is silent whether to use award year or current year funds for an in-sope mod. WIFCON, "Bona Fide Needs Rule" - "…a within-scope price adjustment, which is requested and approved in a subsequent fiscal year [subsequent from the current contract obligation], for example, under the “Changes” clause, will... be charged against the appropriation current at the time the contract was originally executed." - I.E. IN-SCOPE mods mut use award year funds
I need a sanity check. My management wants me to award a delivery order with FY14 funds for supply items that will go from date of award through March, 2015. We have an immediate need for *some* of the items, but some aren't required until FY15. For those items that are not required until FY15, we cannot tell the contractor the exact quantities or delivery addresses. The quantities on the order will be based on projected estimates based on historical figures. In accordance with the GAO Principles of Federal Appropriations Law (Redbook) (Chapter 5.B.4), which discusses taking receipt of deliverables after the end of the FY, the exceptions appear to be if there is a stock program or if there is a production lead time. We do not meet either of those exceptions. Legal's response: "The bona fide need rule is satisfied because the agency had a blanket and continuing need to provide these items when the IDIQ contract was executed in FY14, and that need crosses into FY15." My immediate supervisor claims that we are okay because we have an immediate need for SOME of the items this FY, so it's fine that we can't tell the KTR exaclty what we need by 9/30/14 (and wait to tell them well into FY15, as the needs arise) because "it's still within a one year period." Keep in mind, this is for supplies, not services. I believe that the delivery order should only be placed for items that we have a bonafide need for this FY. Thoughts?