fereirra

Moving funds from and ODCs CLIN to a Labor CLIN

11 posts in this topic

CPFF contract

Can funds from an ODCs CLIN be moved or "re-aligned" to a labor CLIN in the same contract? No increase in scope or effort, just unexpended ODC funds to be used to cover additional labor costs not forecasted initially.

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1. What is the contract type?

2. Are the funds from the same appropriation and account?

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1. What is the contract type?

2. Are the funds from the same appropriation and account?

Answers:

1. The contract type is Cost Plus Fixed Fee (CPFF).

2. Yes, the funds are from the same appropiation and account.

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Think about this: I presume that the labor CLIN has an estimated cost and fixed fee. In order to move the money you'll have to deobligate funds from the ODC CLIN and then obligate them on the labor CLIN. Right? Now, by definition, when you do that you'll be changing the rights and obligations of the parties under each CLIN. For example, in order to obligate the funds on the labor CLIN you'll have to increase the estimated cost. Right? What will your explanation be? Are you funding an overrun or adding work? It seems to me that it will have to be one or the other. What about the ODC CLIN? Are you deobligating funds because the contractor underran or because you are changing its obligations under that CLIN?

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Think about this: I presume that the labor CLIN has an estimated cost and fixed fee. In order to move the money you'll have to deobligate funds from the ODC CLIN and then obligate them on the labor CLIN. Right? Now, by definition, when you do that you'll be changing the rights and obligations of the parties under each CLIN. For example, in order to obligate the funds on the labor CLIN you'll have to increase the estimated cost. Right? What will your explanation be? Are you funding an overrun or adding work? It seems to me that it will have to be one or the other. What about the ODC CLIN? Are you deobligating funds because the contractor underran or because you are changing its obligations under that CLIN?

Yes, I see where you're coming from. So is the short answer "no," because the increase in labor would be considered an increase in scope? The only justification I can come up with is projected ODC expense was not fully expended due to less travel needed. And "unforeseen" overtime requirements increased labor cost dramatically.

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Well, if unforeseen overtime increased labor costs, then it sounds like you've experienced a cost overrun. If so, that's your explanation for moving the money. You'll have to increase the estimated cost by the amount of the actual or projected overrun and them deobligate/obligate. Should be no problem. Document the file to explain.

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What do you mean by "the expired phase" and are they needed to cover obligations that occurred during "the expired phase"?

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In my organization we use the following definitions to describe the different fund cycles:

Active: Available for obligation and to expend those obligations

Expired: Available to expend and adjust obligations already incurred

Canceled: Accounts canceled. Obligations or adjustments that would otherwise be chargeable to these years must be charged to active funds

Well based on the original post I believe this individual would be trying to fund and overrun by deobligating/obligating from one CLIN to another. So I guess the question is - does the funding of an overrun constitute a new obligation?

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An additional consideration for you -- will your automated system let you do it -- my agency has a sort-of dimwitted automated system that will not let me deobligate previous-year money from one CLIN and re-oblibate it on another CLIN on the same contract -- even on a construction contract with estimated quantities -- so even though I can by right use an "underrun" on one estimated quantity CLIN to pay for an "overun" on another estimated quantity CLIN, my automated system won't let me.

This failing in our automated system causes contracting officers to do work-arounds.

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ji20874 brings up a good point. Assuming the labor portion was not funded to ceiling and therefore you aren't talking about a ceiling increase, your system may consider the movement of funds from one CLIN to another as a de-ob from laboe and obligation to ODCs. Since funds are expired, they would be ineligible for obligation at this point in time and system may prevent it. However, if your system does not tie the lines of accounting to the CLINs, then you may be able to do so systemwise because the system doesn't count it as a de-ob/re-ob. In my part of GSA the system would allow us to do it - but the finance folks who certify the funds would raise questions.

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