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Solicitation without funds


jwomack

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KO solicits competition prior to having funds certified as available and does not notify the perspective contractors of such. Is this allowable?

Assume no bad faith on behalf of the Government, 52.232-18 does not apply, and 52.232-19 does not apply.

I believe this would be allowable for an RFQ but am unclear with regards to an RFP.

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Why does 52.232-18 not apply? It seems to me based on your scenario that they are soliciting without funds being available (if they're not certified as available, they aren't available, imho).

Why do you feel this is allowable under an RFQ but it is unclear for an RFP? I guess I'm just not following your logic.

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KO solicits competition prior to having funds certified as available and does not notify the perspective contractors of such. Is this allowable?

Assume no bad faith on behalf of the Government, 52.232-18 does not apply, and 52.232-19 does not apply.

I believe this would be allowable for an RFQ but am unclear with regards to an RFP.

To clarify your question, are you saying that the conditions in FAR 32.703-2 and 32.706-1 and any supplements thereto do not apply in order to use the clauses at 52.232-18 or 52.232-19? If not, what did you mean? Also what is the agency? Thanks.

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Guest Vern Edwards

Don is generally correct about soliciting offers. However, FAR 32.703-2 and 32.706-1 do require inclusion of the availability of funds clause in solicitations in certain circumstances in order to alert prospective contractors that funds are presently not available.

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Joel,

DOJ. Yes, that’s what I meant. Accordingly, Don/Vern’s answers appear to be what I was looking for.

Desperado,

52.232-18 only applies (i.e., is prescribed for application) when a contract will be chargeable to funds of the new fiscal year and the action will be initiated before the funds are available (FAR 32.706-1(a )). So if I were to solicit today for an award I intend to make within a couple of weeks using [uncertified] current year money, then 52.232-18 would not be applicable/prescribed.

Allowable for RFQ but maybe not for RFP – Intuitive, I guess, probably for the wrong reasons.

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If you are going to issue an RFP or RFQ without having funds, you really should disclose it in the announcment.

You will typically see Air Force solicitations that do this. They will say something like "funds are not currently available for this requirement, but are expected to become available on or before September 30, 201x".

Here are some Google search examples from FBO...

https://www.google.com/search?q=funds+are+not+currently+available+site%3A.fbo.gov

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As I remember, there is an Air Force Far Supplement requirement to do this -- but other agencies don't have that requirement...

From what I remember, it's more like internal Air Force policy. It was "Special Acquisition Authority (SAA)".

You're probably thinking of the Army FAR Supplement:

5101.602-2 -- Responsibilities.

Contracting Officers must validate Contracting Officer Records and Ordering Officer Records every 12 months to ensure compliance with the terms of the contract. A written record of the review is to be placed in the contract file.

(a) (i) Except as authorized in FAR Subparts 17.1 and 32.7 and in (ii) and (iii) below, before issuing a solicitation, the contracting officer must have a written statement (or equivalent) indicating that sufficient funds are available.

  • (ii) Solicitations may be issued for high priority requirements and Research, Development, Test and Evaluation (RDT&E) incrementally funded contracts before ensuring availability of funds when there is a high probability that the requirement will not be canceled. For foreign military sales (FMS) cases, solicitations may be issued after the submission of an offer from the FMS customer country, but before assurance of funds availability when the United States Army Security Assistance Command determines in writing that the offer appears certain to be accepted.

    (A) The contracting officer shall not issue a solicitation under the circumstances in (a) (ii) unless the comptroller or designee has signed the following statement on the purchase request:

    “This requirement is included or provided for in the financial plan for fiscal year ______. The accounting classification will be _______. This statement is not a commitment of funds.”

    (B) The contracting officer shall include the following statement in all solicitations issued pursuant to this authority when the clause at FAR 52.232-18, Availability of Funds, is not used:

    “Funds are not presently available for this acquisition. No contract award will be made until appropriated funds are made available.”

    © No contract shall be awarded nor shall a prospective contractor be notified of a pending award until funds have been certified to be available by the operating official designated by local regulations or by a “delegation of authority” letter as the official authorized to certify to funds availability.

    (D) No solicitation shall be issued for a contract for research and development which is to be incrementally funded over successive years unless planned funds (Future Years Defense Plan (FYDP)) are sufficient to accomplish it. An exception may be approved by the HCA, provided the approval identifies steps to be taken to revise the approved FYDP to include adequate resources.

    (iii) Industrial-funded public activities need not comply with (i) and (ii) when issuing solicitations to support offers they will send under the Defense Depot Maintenance Competition Program (Pub. L. 102-396), the Partnership Program (10 U.S.C.2208 (j)) or competition under the Arsenal Act (10 U.S.C.4532(a)).

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Guest Jason Lent

MP 5332.7, as linked to in the AFFARS 5332.7, requires coordination with the Holy Trinity (FC/FD, Director of Contracting, and the Comptroller) prior to soliciting without funds in most day-to-day circumstances but offers a couple other conditions where and RFP can be issued (in the instance of the Air Force).

Release of Requests for Proposals (RFP) in Advance of Funding Availability

1. Except for solicitations issued in accordance with procedures at FAR 32.703-2, a Request for Proposal (RFP) may be released, conditioned on the availability of funds only when using the procedures described in subparagraphs (a), (B), or © below. The following statement must be included in any such solicitation: “Notice to Offeror(s)/Supplier(s): Funds are not presently available for this effort. No award will be made under this solicitation until funds are available. The Government reserves the right to cancel this solicitation, either before or after the closing date. In the event the Government cancels this solicitation, the Government has no obligation to reimburse an offeror for any costs.”

(a) When the resulting contract is to be funded by Procurement or Research, Development, Test, and Evaluation, Appropriations, and the program/requirement has been included in the President’s budget as submitted to Congress. In these instances, the program manager must provide the contracting officer a written statement (coordinated with FM at the Center level (or equivalent)) or as delegated to FM Organizational Senior Functional (OSF) that these investment funds will be used for the proposed acquisition and although not presently available, a reasonable expectation exists that funding will be authorized and available upon enactment of the Authorization and Appropriations Acts.

(B) Solicitations for programs funded by the National Guard and Reserve Equipment Account when the Defense Appropriations Act is signed into law, for the Air National Guard Bureau and/or Air Force Reserve Command provided the Air National Guard or Reserve program manager confirms that funds have been identified for the acquisition.

© For solicitations funded by annual appropriations when the MAJCOM/DRU/AFISRA Requiring Activity Functional Commander/Director, Director of Contracting, and Comptroller jointly agree in writing to authorize the contracting office to issue solicitations when it is anticipated that the contract(s) will be funded, but funds are not yet available.

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Why?

To me, it is a matter of good faith dealings with industry. Depending upon the type of acquisition, bidders/proposers/offerors may spend considerable resources, time and cost to prepare a bid/proposal/quote/offer. For construction solicitations, the bid bonds that are required sometimes tie up those firms' bonding capacity, which could be used for other ventures. In addition, some owners have used dummy solicitations to pfish for pricing information with no intention of awarding a contract. Here is a link to a Federal Transit Administration Q&A website that discusses this issue:

http://www.fta.dot.gov/13057_6231.html

Here are two questions from that page:

"Q. Is it required that funding for a purchase be identified before solicitation? I recall that the Federal Acquisition Regulation (FAR) requires the vendor be made aware that funding does not currently exist (if that is the case) for this purchase. I cannot find where FTA regulations address this topic.

A. The FAR is not binding on grantees and FTA has no regulations that would prohibit a grantee from issuing a solicitation without having funds available. We would advise notifying bidders/offerors in the cover letter to the solicitation that funds are not currently available but are anticipated in time to make the award. This would put industry on notice that there might be a risk in preparing a bid/proposal that could not be acted upon by the agency. (Reviewed: September 1, 2009)

Q. If the funding is not available for an engine refurbishment program, but the maintenance department is requesting to go out for bid to verify the job costing and availability of suitable parts, would this action be illegal when grants for the requirement have not approved?

A. Soliciting bids without having the funds to make a contract award is not a best practice. Companies have to spend time and money to prepare the bids with no chance of award, and the process would also reveal bid prices to competitors with no financial gain.

If the purpose of the solicitation is simply to verify the availability and the price of the parts, you should issue a Request For Information (RFI) and ask the industry to provide information on parts pricing and availability. Other less formal means of market research could also be employed.

If you expect to soon obtain the funds, you should inform prospective bidders in the solicitation that you currently do not have funds to make an award but expect to obtain them in prior to making award."

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