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I need a sanity check. My management wants me to award a delivery order with FY14 funds for supply items that will go from date of award through March, 2015. We have an immediate need for *some* of the items, but some aren't required until FY15. For those items that are not required until FY15, we cannot tell the contractor the exact quantities or delivery addresses. The quantities on the order will be based on projected estimates based on historical figures.

In accordance with the GAO Principles of Federal Appropriations Law (Redbook) (Chapter 5.B.4), which discusses taking receipt of deliverables after the end of the FY, the exceptions appear to be if there is a stock program or if there is a production lead time. We do not meet either of those exceptions.

Legal's response: "The bona fide need rule is satisfied because the agency had a blanket and continuing need to provide these items when the IDIQ contract was executed in FY14, and that need crosses into FY15."

My immediate supervisor claims that we are okay because we have an immediate need for SOME of the items this FY, so it's fine that we can't tell the KTR exaclty what we need by 9/30/14 (and wait to tell them well into FY15, as the needs arise) because "it's still within a one year period." Keep in mind, this is for supplies, not services.

I believe that the delivery order should only be placed for items that we have a bonafide need for this FY. Thoughts?

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If you are using annual appropriations, bona fide needs of FY14 must be funded with FY14 appropriations before they expire. Unfulfilled needs of FY14 become bona fide needs of FY15 and must be funded with FY15 appropriations. Bona fide needs arising in FY15 must be funded with FY15 appropriations. If Legal and your supervisor are saying that you can use FY14 funds to purchase supplies that you don't need in FY14, then they are wrong.

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Don, I think you are misstating the rule. My understanding of the bona fide needs rule is that annual appropriations can be used to fund a need that arises during the period of availability for the funds regardless of when actual performance occurs. However, from what has been provided, I don't think that anonco has identified a current bona fide need for the items that may be needed in FY 15.

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Don, I think you are misstating the rule. My understanding of the bona fide needs rule is that annual appropriations can be used to fund a need that arises during the period of availability for the funds regardless of when actual performance occurs. However, from what has been provided, I don't think that anonco has identified a current bona fide need for the items that may be needed in FY 15.

You're correct. I left out the part that the funds must be obligated during their period of availability. Bona fide needs of FY14 that are unfulfilled in FY14 become bona fide needs of FY15 and cannot be satisfied using FY14 funds. I'll edit my post.

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Guest Vern Edwards

Write a memo to file describing the instructions from your supervisor and the opinion of the legal office, and stating your concerns and doubts and what you would do instead. If the legal office put its opinion in writing, attach the opinion to your memo. Put a copy of your memo in the file, keep a copy for your personal files, and give a copy to your supervisor and the legal office. Make sure to show on the memo that you gave copies to your boss and the legal office. Then go on with the procurement.

That is a tough course of action, but if you don't want to do it, then what are you going to do?

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Thank you! ...and you all agree that since we *know* we will need the supplies in FY15, it still does not constitute a bona fide need in FY14? Does the arguement make any sense that if a portion of the requirement is fulfilled in FY14, then it's okay to have it go through FY15...for supplies?

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Guest Vern Edwards
...and you all agree that since we *know* we will need the supplies in FY15, it still does not constitute a bona fide need in FY14?

I did not agree to that.

I don't believe that you have provided enough information for anyone to give you an opinion. And I feel that you have presented the case in a one-sided way. We have seen only your relation of the facts, your characterization of your supervisor's remarks, and a single conclusory sentence from the legal office. No one should give you an opinion, much less support your position and take your side, based on that kind of information.

If you disagree with your boss and the legal office, write a memo to the file, as I suggested, and carry on, or ask to have the contract action assigned to someone else.

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Leaving aside for the moment the question of how you will write a delivery order based on estimated quantities when you do not know the quantities that will be needed (and the associated problem of what you will do if the estimate turns out to be too high or too low), when do you need to order the items to ensure they are available when you need them in FY15? If your production lead time is relatively short, so that you do not need to order the items in FY14, they are bona fide needs of FY15 rather than FY14. If you need to order them in FY14 in order to have them available when needed in FY15, they are either (perhaps depending on semantics) a bona fide need of FY14 or an exception to the bona fide need rule which allows you to order them in FY14.

I am just guessing here, but I suspect that the legal opinion ("The bona fide need rule is satisfied because the agency had a blanket and continuing need to provide these items when the IDIQ contract was executed in FY14, and that need crosses into FY15") is an effort to express the lead-time aspect of the bona fide need rule.

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Guest Vern Edwards

I just checked at the GAO website and at Westlaw, and "Delivery of Materials Beyond the Fiscal Year" is still in Volume I, Ch. 5, B.4. It has not been removed. The update/revision you looked at includes only changes. It is not a new full text.

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I just received the following e-mail:

March 13, 2014

The Government Accountability Office (GAO) today issued the following Decisions and Opinions of the Comptroller General:

Appropriations Decisions:

GAO-14-163SP, Principles of Federal Appropriations Law: Annual Update of the Third Edition, March 13, 2014 http://www.gao.gov/products/GAO-14-163SP

This is the annual update of the third edition of Principles of Federal Appropriations Law. Our objective in this publication is to present a cumulative supplement to the published third edition text that includes all relevant decisions from January 1 to December 31, 2013.

===========================================================

This list is produced by the Government Accountability Office to provide information about GAO Decisions. The home page for GAO is http://www.gao.gov

Note that the document is " ... a cumulative supplement to the published third edition text that includes all relevant decisions from January 1 to December 31, 2013."

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  • 2 weeks later...

If you could tell me what you are supposed to buy specifically, I probably could help. Bona fide need can be a tricky thing. The items you need now are definitely a need of FY14. Assuming you are using annual funds and assuming you have historically purchased the items you need now and those you need later, the patterns you have executed in the past become pertinent. What if you get better pricing if you buy xxxxx number of these items? Or what if your usage rate is squirrelly and therefore you have to buy more because you can never, never run out of the item so you have to overstock to your highest usage rate even if you don't use it this year. Still it is a bona fide need.

So tell me the rest of the story. Leave out the pressure you are getting and stick with the facts that you know about what you need to buy and why you think the items that aren't required until FY15 are being purchased.

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