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Access to CLIN funding after POP end date


Toodle9034

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We have a contract with different contract types per CLIN. PoP does NOT align with fiscal years.

CLIN 0001 was awarded as an IDIQ with a 5 year POP. This CLIN is to be used to issue FFP or LH task order projects against. The POPs of these projects vary from 60 days to one year, often crossing fiscal years. Labor funding for all projects is put at a top level under this CLIN. Each project award states in which option period x002 the associated dollars will be funded.

CLIN x002 was awarded as a one year with 4 12-month options Cost Reimbursable contract type for the non-labor costs (Travel, Materials, ODC) associated with all of the projects awarded under CLIN 1. Non-labor funding for all projects is put at top level under this CLIN

There are severable and non-severable projects that were awarded under CLIN 0001.

During the end of the fiscal year, the vendor recommended to the government that the excess funding on CLIN 0002 needed to be moved to the next option period CLIN 1002. The government failed to move the dollars in time. The POP ended on CLIN 0002.

We are now in a situation where there are projects that have been contracted for and continue to have POP; however, the dollars for the non-labor are “trapped” in the last option period.

Government and vendor are looking for ways to be creative in approach in mitigating the risk of the government losing their money. We know that the government cannot move the money on the expired CLIN 0002 or they will certainly lose the money. Our thought was that we could extend the POP on CLIN 0002 to match the remainder of time on the 5 year CLIN. We would also revise the POP on CLIN 1002 to match the remainder of time on the 5 year CLIN. If the contractor and the government both agree on this bilateral modification, is there anything that would prevent us from extending the PoPs even though the POP on 0002 has ended?

Can CLIN 0002 be revised that instead of the CLINS being exercised based on a date, could they be exercised on task order numbers ex. Task Orders 01-100 are on CLIN 0002, Task Order 101-200 are on CLIN 1002.

We have been told this contract is a Class C contract but should have been set up as a Class D contract. Government policy group is pushing to change the contract class. (This concept of Contract Classes is a new one for me, any information you could provide would be helpful). There is only a year and a half left on the 5 year contract. I’m looking for any suggestions and clause references that we could use to help support a creative solution to be able to keep the dollars. We are not looking for additional dollars to be obligated, only for those dollars that were obligated to be able to be expended based on the projects that still have active POPS.

The volume of task orders is currently in the 400s. We would prefer not to set each task order up separately with labor and non-labor awarded individually. Funding is as the top level and not at the individual project level.

Many thanks for your insights.

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The above sounds very confusing, so I can't comment on your specific situation.

Having said that, I suspect the bona fide needs rule applies to your situation.  The bona fide needs rule states that a fiscal year appropriation may be obligated only to meet a legitimate, or bona fide, need arising in, or in some cases arising prior to but continuing to exist in, the fiscal year for which the appropriation was made.  This is one of the main principles of appropriations law.

With respect to the severable services, it the type of appropriation used matters.  If funded by single year appropriation, it can only be used to fund serverable services across FYs, for a time period not to exceed 12 months (FAR 32.703-3).  If funded by a multi-year appropriation (e.g., FY 16/17), those funds could not be used for serverable services in FY 18 since since they are only available for the bona fide need of FYs 16 and 17.  If the multi-year fund was FY 17/18, they could be used for a severable service until the end of FY 18.  If a no year appropriation was used, the bona fide needs rule and issue of severability does not apply.

A non-severable service is chargeable to the fiscal year in which it was made, notwithstanding that performance may have extended into the following fiscal year.  Having said that, if the time period availability of the appropriation used has expired (e.g., FY17 annual appropriation), those funds cannot be kept obligated used for a new non-severable project started in FY18.

Any time I hear that someone is concerned with "losing" their funding and is trying to find ways to keep it so it can be used in subsequent fiscal years, there is a good chance there could be a bona fide needs violation either existing or about to exist.

More information on the bona find needs rule can be found on this site at: http://www.wifcon.com/bonafidecontents.htm 

As far as the "Class C" and "D" type contract is concerned, I'm not sure what this means.  It almost sounds like someone may have awarded an indefinite delivery contract (FAR Subpart 16.5), but didn't put it in the system that way.  See the contract prefixes at FAR Subpart 4.16.  Prefix D is used for indefinite delivery contracts.  If it truly is an indefinite delivery contract (contains FAR 52.216-XX clauses), then the type of IDC would matter.  If it were an indefinite quantity contract, only the guaranteed minimum stated in the contract should be obligated.  Subsequent orders are obligated as requirements are developed for projects and orders are placed under the contract.  If the guaranteed minimum is not satisfied during the period of availability of the appropriation used for its initial obligation, the obligation must be updated to utilize a current year appropriation.  I'm not sure, but it almost sounds like this could be an indefinite delivery contract that someone just obligated funds on and planned on using those funds as needed over the multiple fiscal years.  

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Guest Vern Edwards

Toodle9034:

I have never read a more confused and confusing post than yours. I think you want to de-obligate funds on one or more line items and re-obligate them on one or more others. If so, then the key facts are what kind of funds you have, not the business about contract types and CLINS, severable projects, and blah, blah, blah. Most of the information that you provided is irrelevant.

Try revising your post without all the history and without your own assessment of the situation. Just say what kind of funds are involved (one year, multiple year, or no year), what their current status is, and what you want to do with them and use them for. Then, if you are clear enough, someone might be able to help you.

Before you post again, read Principles of Federal Appropriations Law, Volume 1, Chapter 5, which is available here: 202437.pdf.

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On 11/17/2017 at 4:10 PM, Toodle9034 said:

We have been told this contract is a Class C contract but should have been set up as a Class D contract. 

Let me guess:  they've been issuing funded Modifications instead of proper Delivery Orders to obtain their task-level requirements?  

My advice to you is to start drinking heavily.
 
 
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