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anonco

Fiscal Law - "Purpose" question

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My agency has a requirement solely for the demolition of existing structures, with no post-demolition construction. Pursuant to FAR 37.301, this will be a service contract versus a construction contract. As such, is there a potential ADA violation if the contract is funded with MILCON funds? The demolition is included on a DD Form 1391; however, the demolition work has since been segregated from the “true” construction work. We will now be issuing two contracts, one for the demolition and one for everything else that is on the DD Form 1391. The structures to be demolished and the land it occupies have never had a relationship to the other work on the DD Form 1391 other than the fact that they both ended up on the same DD Form 1391. There is no proposed immediate or future construction on the demo site in the base’s master plan.

The program office, budget office, and counsel contend that MILCON funds are authorized/appropriate solely because the demolition is listed on a DD Form 1391. I am leery about using MILCON funds on a service contract, but seem to be the only one here that has reservations. Is the mere fact that something is listed on a DD Form 1391 all the logic/evidence needed to ascertain that MILCON funding is the proper funding source and would not violate fiscal law?

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Anonco,

All I can say is if you have clearly articulated the answer you received as, "The program office, budget office, and counsel contend that MILCON funds are authorized/appropriate solely because the demolition is listed on a DD Form 1391.", I'm speechless. MILCON funds come from an appropriations act and as such their use is restricted by what is contained in the appropriation, not, just the form as the two go hand in hand. I'm not impressed at all by the answer you were provided, but, who am I?

I personally do not know if MILCON funds can be used for "demolition" as I've always been under the understanding that the funds were to be used for "construction" only. However, I was never faced with your situation. I would recommend contacting someone in a Corps of Engineers contracting shop or researching a little further using a google search using the terms, can MILCON appropriations/funding be used for demolition, or, under what circumstances can MILCON funding be used for demolition...something along those lines. I'm also a little strange in that I would actually read the bill for my own edification.

I realize I didn't offer much in the order of an answer, but, I was compelled to respond to the answer you received. Please let us know your findings as it may assist someone with similar issues.

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According to the Fiscal law Deskbook; "Demolition of an excess facility is always classified as repair." So it appears the use MILCON funds would be appropriate.

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You say that there is no post-demolition construction, but then you say that the demolition is segregated from the construction. If there is no post-dmolition construction, what construction needs to be segregated? If there is some construction to follow, doesn't 37.301 say the demolition is construction subject to Davis-Bacon?

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Pup, the poster said that there is no relationship between the buildings to be demolished and the site work or new construction. I took that to mean that it is a separate site or that the demo is not necessary for the construction project.

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Joel--that is correct. These are completely different sites (a few miles apart from one another).

TAP--I looked at the Fiscal Law Deskbook previously, but not sure it clarifies the situation. That definition of demo as a repair comes from a Navy regulation and I am not Navy.

GoGoldPA--I agreee. I am in the process of trying to find the legislation so I can see exactly what it says for myself.

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There was a time when you could request an opinion from GAO but most agencies do not allow that so I would recommend you/PCO send a written request through your legal and financial channels to the DOD General Counsel. This should answer your question and you can move from that and have support in the file in case there is a subsequent ADA investigation, audit or IG review. Bottom line: if you still have a question get the answer in writing from the proper office - DOD General Counsel.

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It may be possible that the demolition of existing facilities was actually related to the authorization of new facilities. I don't know what Branch of service the Installation is. However, before going to DOD general counsel it would be advisable to contact the office or organization that prepared the DD1391 to learn why and under what authority they included the Demolittion of existing real property in the project. There are are usually multiple layers of review of DD's 1391 before Congress acts. You don't have enough information for DOD General Counsel to make a determination. I would start within the Service that owns the property. I would think that the location of the existing property would have been described in the planning documents that accompany the line item page of the 1391.

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Anonco,

According to the DOD FMR,

Section 060201.

1. Immediate Subordinate Account: Major Construction. Includes construction projects authorized under Title 10 United States Code (U.S.C.), section 2802 for the purposes of erection, installation, or assembly of a new facility; the addition, expansion, extension, alteration, conversion, or replacement of an existing facility; or the relocation of a facility from one installation to another. Includes equipment installed and made a part of such facilities, and related site preparation, demolition, excavation, filling and landscaping, or other land improvements.
Based on this, I believe that demolition can be done using MILCON funds as it falls within the definition of major construction according to the FMR.
However if you still have questions, rather than ask the GAO Comptroller General for an opinion of funds use, since you are within DOD, my understanding is you would request the opinion from the DOD Comptroller at DFAS.

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uva, please note that Section 060201 of tghe FMR is describing related site preparation, demolition, excavation, filling and landscaping, or other land improvements. Thus the demolition and site work would have to be related to the facility. Anonco is concerned that there seems to be no relationship of the demo site to the new construction, which is a few miles from the demo site.

The DOD Comptroller at DFAS would have no knowledge of the connection between the two sites. My point is that anonco should go to the source who prepared the DD1391 PACKAGE. That package was reviewed by an Installation committee before submission by the Installation, then reviewed at HQ within the Agency, then by DoD before going to Congress. Anonco apparently needs to find out if and how the separate sites are related in order to be satisfied.

And YES, I have had projects where we demolished existing structures with MILCON funding but they were part of the authorized project and were replaced with the new facilities. This is a separate question where the nexus between sites is not apparent on the face of reading the line item pages of the 1391 per anonco.

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Dug into this more. The requirement is at a Joint Base where the Army is the lead agency. The Army has a regulation (AR 420-1) that states any new construction must be offset by demolition of existing stuctures of an equal or greater square footage. Generally, the Army is required to demolish buildings with the same mission. However, the regulation describes specifically the supporting analysis and rationale that must accompany the 1391 if non-related structures are to be demolished and MILCON funding is being utilized. So it appears the simple answer for the Army is that if it is on a 1391, it is because demolition has to occur for new construction*. The link between the new and old facilities does not have to be direct and, notwithstanding FAR definitions ultimately classifying demoltion being a service or construction, may be appropriately funded using MILCON funds.

Thanks for all the previous replies.

* There is an exception--the Army can "bank" previous demolition. If that bank has square footage greater than or equal to new construction, no demolition has to occur for the new requirement.

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anonco, that is what I suspected. Thanks for closing the loop.

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