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Question about Bona Fide Needs


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My question relates to the usual last minute rush to get all of the current year's appropriations obligated before the end of the fiscal year.

I'd like to know whether or not a prior year's annual appropriation can be obligated after the new fiscal year has begun if the need for the services arose and existed in the prior year, and the program office's request was delivered to Acquisition's personnel with enough time to have a contract awarded that year. Under this scenario, the contract does not get awarded prior to the end of the fiscal year due to factors beyond the control of the program office.

In other words, a research division determines it has a bona fide need for a researcher on July 1st of FY 2012. A complete procurement request package is delivered to Acquisition personnel on July 20, FY 2012. Funds to be used for this requirement are from a FY 2012 annual appropriation. Due to workload or other factors, acquisition personnel don't get the contract awarded until November, FY 2013, time at which the annual appropriation is no longer available.

Is it appropriate to obligate the FY 12 annual appropriation against this contract awarded in FY 2013 since the services that are being procured are a bona fide need of the previous year?

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Is it appropriate to obligate the FY 12 annual appropriation against this contract awarded in FY 2013 since the services that are being procured are a bona fide need of the previous year?

No. What matters is when the obligation is created. Sending a procurement request to a contracting office does not create an obligation. Awarding a contract creates an obligation.

Also, if you still need the services after the passing of FY12, then they would then be a bona fide need of FY13.

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Except under limited circumstances, which are discussed in the GAO Redbook or in financial regulations, annual funds generally expire for the purpose of an obligation at the end of the fiscal year or period for which they were appropriated. It doesnt generally matter that the contracting office was unable to make the award beofre the expiration of the funds.

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I appreciate everyone's feedback. I was providing a hypothetical example with the dates, but it's something I've wondered because we do encounter this on occasion. The need I normally deal with is research, so it is non-severable in most occasions. I don't believe that the fact that the service will carry over into FY 2013 makes it a bona fide need of 2013. Unfortunately, I didn't make a note of it, but I thought I read recently that the appropriate funds to obligate are the funds current at the time a bona fide need arises. That made me think that it may not necessarily be a function of when the award is made.

I would agree that if the program office's "need" arose in August or September it would be questionable, but I was wondering if there was a genuine need and the program office is trying to use funds in a timely manner that were appropriated to them, but they become hindered due to contracting personnel actions, why wouldn't they be able to use those funds?

If it's simply based on when the award is made, then my question is answered. Thanks everyone.

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I don't believe that the fact that the service will carry over into FY 2013 makes it a bona fide need of 2013.

From p. 5-18 of the GAO Red Book:

There are situations in which it is not only proper but mandatory to use currently available appropriations to satisfy a need that arose in a prior year.14 We refer to this as the “continuing need.” If a need arises during a particular fiscal year and the agency chooses not to satisfy it during that year, perhaps because of insufficient funds or higher priority needs, and the need continues to exist in the following year, the obligation to satisfy that need is properly chargeable to the later years funds. “An unfulfilled need of one period may well be carried forward to the next as a continuing need with the next periods appropriation being available for funding.” <a href="http://redbook.gao.gov/14/fl0069038.php">B-197274, Sept. 23, 1983. Thus, an important corollary to the bona fide needs rule is that a continuing need is chargeable to funds current for the year in which the obligation is made, regardless of the fact that the need may have originated in a prior year.

What do you believe now?

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I believe what you just shared. So my hypothetical need in FY 2012 is an unfulfilled need that can be carried forward to FY 2013 as a continuing need with FY 2013 funds being available for funding, as stated by "An unfulfilled need of one period may well be carried forward to the next as a continuing need with the next periods appropriation being available for funding."

Thank you for clarifying this for me.

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