Requirement to execute Options and other actions that expire on September 30th on October 1st

[Marius M.]

Hi...I have a question and I'm having a debate with leadership and the Policy Office. They are stating that if there are contracts/Task Orders/Purchase Orders/BPA that have an end date of September 30th, that per the Recording Statute we MUST sign the contracts/TOs in the correct Fiscal Year. Which means we would have to sign any action to exercise the Option Period or renewal on October 1st.  My constituents and I believe and argued that if you wait until October 1st to sign these actions, that the contract has already died as it was not awarded BEFORE the end of the Period of Performance. We posed the question as to why would we not award before or on September 30th, with an effective date of October 1st and were told not to do this because of the previously mentioned Statute. What are your thoughts on this and what is a possible solution that would allow the Contracts/TOs/etc. to continue on and not die on September 30th.

[bosgood]

15 hours ago, Marius M. said:

that per the Recording Statute we MUST sign the contracts/TOs in the correct Fiscal Year

Do you have the citation for this statute?  The only references to anything like this involves recording real property interests and not anything related to gov't procurement.

Also, contracts usually contain clauses requiring the gov't to provide advance notice of exercising an option, thus allowing the contractor to plan, as needed.

[Vern Edwards]

20 hours ago, Marius M. said:

Hi...I have a question and I'm having a debate with leadership and the Policy Office. They are stating that if there are contracts/Task Orders/Purchase Orders/BPA that have an end date of September 30th, that per the Recording Statute we MUST sign the contracts/TOs in the correct Fiscal Year. Which means we would have to sign any action to exercise the Option Period or renewal on October 1st. 

😂

4 hours ago, bosgood said:

Do you have the citation for this statute? 

Generally, in procurement matters, mentions of "the recording statute" refer to 31 USC § 1501, Documentary evidence requirement for Government obligations.

The "recording statute" is discussed in depth in GAO, Principles of Federal Appropriations Law (the Red Book), Volume II, Chapter 7, Obligation of Appropriations, Part B, Criteria for Recording Obligations, Section 1, Section 1501(a)(1): Contracts.

Read it. The people in your policy office were probably referring to this:

Quote

[T]he general rule for obligating fiscal year appropriations by contract is that the contract imposing the obligation must be made within the fiscal year sought to be charged and must meet a bona fide need of that fiscal year.

That refers to 31 USC 1501(a)(1), which says:

Quote

(a) An amount shall be recorded as an obligation of the United States Government only when supported by documentary evidence of—

(1) a binding agreement between an agency and another person (including an agency) that is—

(A) in writing, in a way and form, and for a purpose authorized by law; and

(B) executed before the end of the period of availability for obligation of the appropriation or fund used for specific goods to be delivered, real property to be bought or leased, or work or service to be provided...

Perhaps your "leadership" and policy people have misinterpreted the statute, or perhaps you have misinterpreted what they have said.

Now read FAR 32.703-2, Contracts conditioned upon availability of funds.