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I have a task order that was reduced in scope and the period of performance was reduced to accomodate the reduction. Now the requiring activity wants to get back what it gave away. I would think this is now a Bonafide need issue. But cannot find anything to support my position. Does anyone know of a similair circumstance where the scope was reduced, and therefore the bonafide need was forfieted?

Thank you for any help Steve

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Steve,

Your post is somewhat vague (or silent) on the facts, so let me "replace" your facts with my own as an aid to discussion.

Hypothetical: If FY10, the agency orders ten widgets with one-year funds. That same year, the parties make a deductive charge decreasing the order quantity to five. The government deobligates the difference in price. In FY11, the agency decides it needs the additional five widgets.

Question: Can the agency use FY10 funds for the additional five widgets?

Answer: I would say not. This would seem to be inconsistent with the Recording Statute. The fact that the agency once had a requirement for ten widgets makes no difference.

Now, your facts may be more complicated than these, but your post doesn't include any facts on how this could be appropriately treated as an upward adjustment, relating back to the original year's obligation.

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Steve,

Your post is somewhat vague (or silent) on the facts, so let me "replace" your facts with my own as an aid to discussion.

Hypothetical: If FY10, the agency orders ten widgets with one-year funds. That same year, the parties make a deductive charge decreasing the order quantity to five. The government deobligates the difference in price. In FY11, the agency decides it needs the additional five widgets.

Question: Can the agency use FY10 funds for the additional five widgets?

Answer: I would say not. This would seem to be inconsistent with the Recording Statute. The fact that the agency once had a requirement for ten widgets makes no difference.

Now, your facts may be more complicated than these, but your post doesn't include any facts on how this could be appropriately treated as an upward adjustment, relating back to the original year's obligation.

Thank you for the help...

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Guest Vern Edwards
Answer: I would say not. This would seem to be inconsistent with the Recording Statute. The fact that the agency once had a requirement for ten widgets makes no difference.

It would not be inconsistent with the recording statute. It would be inconsistent with the Bona Fide Needs Rule.

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Vern, I agree there was no expense that was "properly incurred" in FY10 for the additional five widgets following the downward adjustment, so to use FY10 funds in FY11 would violate the Bona Fide Needs Rule, specifically 31 USC 1502. However, you write, "It would not be inconsistent with the recording statute." The Recording Statute, 31 USC 1501, provides in part:

An amount shall be recorded as an obligation of the United States Government only when supported by documentary evidence of...a binding agreement between an agency and another person (including an agency) that is...executed before the end of the period of availability for obligation of the appropriation or fund used for specific goods to be delivered...or work or service to be provided.

A number of decisions cited in the Redbook on prior years' needs point out the Recording Statute violation. How is what I've described in Post #2 consistent with the Recording Statute? Or are you just saying that it is first and foremost a violation of the Bona Fide Needs Rule?

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I have a task order that was reduced in scope and the period of performance was reduced to accomodate the reduction. Now the requiring activity wants to get back what it gave away. I would think this is now a Bonafide need issue. But cannot find anything to support my position. Does anyone know of a similair circumstance where the scope was reduced, and therefore the bonafide need was forfieted?

Thank you for any help Steve

Steve, you didn't explain if this involved current ot prior year funding. Please clarify. Thanks.

There are rules which restrict re-obligating prior year funds from work that was terminated for convenience. Would this be a similar scenario?

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Steve, you didn't explain if this involved current ot prior year funding. Please clarify. Thanks.

There are rules which restrict re-obligating prior year funds from work that was terminated for convenience. Would this be a similar scenario?

Yes it is a similair issue. I would say that if the requiring activity wants to increase the scope back to the original scope of the task order the current year funds must be used, not original funding from the time of execution. And the once removed work that was re-added would be treated as a new requirement. Thus, my concern for the Bonafide need. I think the added work should have been recompeted....or a J&A done to justify to the work.

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Guest Vern Edwards

You're confusing the problems.

The program office deleted some work and now wants to put it back in. That does seem to be a change in scope. But the issues of bona fide need and new competition are separate. Putting the work back in does change the scope (again). But it's not clear that new competition is needed. Ordinarily, a change in scope would require new competition, but if they deleted it and put it back in a reasonably short time and at the same price, then it might be okay. As for bona fide need--if they deleted it and put in back in the same fiscal year, then you should not have a bona fide need problem. If they deleted it in one fiscal year and put it back in another, then you cannot use the funds of the first fiscal year, because that would violate the Bona Fide Needs rule.

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