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Funding of options with CR funds


Retreadfed

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I know that a different aspect of this topic has been discussed here before. However, I am curious as to whether any guidance has been issued on how to address options for services funded with annual appropriations that must be funded with a CR that provides funding for only a portion of a year? For example, congress is currently considering a CR to allow the government to operate through March, 2013. If an agency has a contract for IT help desk services with an option for FY 13 to be exercised by Oct. 1, how would the funding for FY 13 be expressed on mod exercising the option? Assume the contract contains 52.232-18.

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A continuing resolution usually provides a full year's obligation -- it's just that the date for obligation comes before the end of the year. So usually, we can fully fund our firm-fixed-price annual operations and maintenance service contracts under a continuing resolution. Even if it is a two-week CR, we can fund such a contract for the full twelve months.

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Guest Vern Edwards

Retread: You misunderstand the continuing resolution. It establishes March 27, 2013, as one of three possible deadlines for obligating funds under the continuing resolution. it does not merely "allow the government to operate through March, 2013." Here is the pertinent text:

Making continuing appropriations for fiscal year 2013, and for other purposes.

* * *

Sec. 106. Unless otherwise provided for in this joint resolution or in the applicable appropriations Act for fiscal year 2013, appropriations and funds made available and authority granted pursuant to this joint resolution shall be available until whichever of the following first occurs: (1) the enactment into law of an appropriation for any project or activity provided for in this joint resolution; (2) the enactment into law of the applicable appropriations Act for fiscal year 2013 without any provision for such project or activity; or (3) March 27, 2013.

See the full text at http://www.gpo.gov/fdsys/pkg/BILLS-112hjres117ih/pdf/BILLS-112hjres117ih.pdf.

You can obligate at the current rate. So when you exercise the option you can do so for the full year, not just through March 27. See the Red Book, Vol. II, Ch. 8 for further explanation.

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Unfortunately some budget offices do not apportion the funds that way. They seem to read the law like retread and you can't convince them otherwise. They will only provide funds to the continuing resolution expiration date. Some blame it on OMB for doing the same thing to the Agency. We went nuts cutting mod after mod on those 2 week CRs we had a few years ago. At least this time we have 6 months.

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Boof is right, too -- even though the law and the GAO Redbook and OMB and every principle of fiscal law and common sense say we can fully fund an annual operations and maintenance service contract during a continuing resolution, our budget officers are sometimes unaware of these correct principles and erroneously tell us the Government is only funded through the CR date. They're wrong, but it's difficult to tell some people that they're wrong -- especially for contracting persons to tell budget persons they are wrong about budget rules.

So you might not be able to fully fund your annual operations and maintenance contracts because your organization's budget people won't certify the funds availability.

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  • 6 months later...

Soooo.....anyone else in the same funding boat as me....

[Preface my post by claiming ignorance in this area...but having an eagerness to learn.]

The agency I work for is still obligating partial funds on contracts awarded during FY13. We initially funded contracts for the duration of the then current CR (i.e. March 27, 2013). However, once H.R. 933 was signed into law, we received additional guidance [from our OB; similar to post #s 5 and 6 above] stating to only provide funding for those contracts for an additional month, and only fund new 'operations essential' contracts above a certain dollar threshold for a month. It is what it is.

I understand part of H.R. 933 bill made continuing appropriations for FY2013 to a variety of other federal agencies and programs at what appears to be FY12 levels. I don't quite get if this mean 'technically' those "other federal agencies and programs" [such as mine] are still operating under a CR through the end of FY13, at the current levels (i.e. FY12 levels). I hear some folks say, we are still under a CR because we did not receive an 'appropriations' like some agencies (i.e. DOD, VA, etc.) Others say, we are not under a CR, since we received funding, albeit at the current levels (e.g. FY12). My agency falls under Division F of HR 933.

So, those agencies falling under Divisions A-E of HR 933 received FY13 'appropriations,' whereas those under Division F received funding at the FY12 levles as acknowledged under the CR. What a mess this is....or what a mess inside my head. Again...claiming ignorance, but looking for clarification in the simplest of ways. Thanks in advance!

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This is a common problem throughout the government and is chiefly caused by contracting people not communicating with their budget counterparts. Budget officers need to understand how much money is required to continue operations - see ji20874's comment above. If you have a fixed price contract or a fixed price option for a year's worth of work, you either need to fund it for the entire year or negotiate something different. Then the budget officer needs to work with OMB so your apportionment covers everything required.

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