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19 hours ago, C Culham said:

Yes but the agency must obligate to specific account and record. 

Flash back to VE nearly 20 years, not 20 hours, ago:

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Q. "How can I obligate the minimum at the same time as contract award? Fair opportunity to compete and all..."

A. There is a lot of confusion over the concept of "obligate" in government contracting. An obligation is made when a CO enters into a legally binding agreement, i.e., a contract. What many 1102s call "obligating" is actually the act of recording the obligation by citing the applicable accounting data on the contract document and sending a copy to the agency's finance office. What the GAO requires is that agencies record an obligation at the time that it is made. At the time of award of an IDIQ contract the CO obligates the government in the amount of the minimum quantity. In order to obligate the minimum amount at the time of award, but before issuance of the first delivery or task order, you write down the appropriate fund citation and amount on each contract award document (e.g., SF33, blocks 20 and 21) and distribute a copy the the cognizant finance office. Later, when you issue the first delivery or task order, you refer to the amount of the minimum recorded on the original award document and you record the obligation of any additional amounts that you need to cover the total amount of the order.

Some agencies require COs to issue an order to cover the minimum simultaneous with contract award. That is not necessary.

Q. "Vern's comment: 'U.S. General Accounting Office requires agencies to obligate funds for the minimum quantity at the time of contract award.' Why would the FAR not also require this???"

A. I don't know why the FAR does not expressly require agencies to record the obligation of the minimum quantity at the time of contract award.


 

 

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2 hours ago, napolik said:

Q. "Vern's comment: 'U.S. General Accounting Office requires agencies to obligate funds for the minimum quantity at the time of contract award.' Why would the FAR not also require this???"

A. I don't know why the FAR does not expressly require agencies to record the obligation of the minimum quantity at the time of contract award.

FAR does require it (the clear requirement- and exception to citing the accounting classification is for data elements in line items and subline items).

But let's say FAR doesn't expressly convey the obligation of funds recording requirements...maybe its because recording is a comptroller function and comptrollers have their own book(s) of rules. Also, FAR includes a provision that contracting officers must comply with these other rules:

"no contract shall be entered into unless the contracting officer ensures that all requirements of law [statute or case law], executive orders, regulations, and all other applicable procedures, including clearances and approvals, have been met."

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Well I have learned from this discussion and I concluded on some opinion as well.

I have learned that the current wording of FAR subpart 4.10 did not come into being until January 13, 2017.  (Ref. FR Vol. 82, No. 9 1/13/17 Page 4709).  Prior to that FAR subpart 4.10 was one sentence in length.  And it stated -" 4.1001 Policy. Contracts may identify the items or services to be acquired as separately identified line items. Contract line items should provide unit prices or lump sum prices for separately identifiable contract deliverables, and associated delivery schedules or performance periods. Line items may be further subdivided or stratified for administrative purposes (e.g., to provide for traceable accounting classification citations)."

@napolik I now wonder if historic posts from 20 years ago mean much considering when the FAR included more substance in subpart 4.10.

@Retreadfed I do not disagree with your latest post as to the process you have pointed out.

@Jamaal I would like to add a friendly amendment to your latest post that CO's are to ensure "that sufficient funds are available for obligation" as well.  I still am conflicted that CO's obligate and almost conclude they simply sign a contract.   The comptroller obligates and records.  Why?   A CO could in fact sign an unauthorized commitment (something over their warrant level) and in such a case it is not an "obligation" until ratified. 

In my humble opinion  I have come to the conclusion that the FAR Council was conflicted in implementing the final rule with regard to an exception to IDIQs for appropriation and accounting data.   Why?  In reply to respondents noting that some existing systems have the ability to trace financial data to the degree that @Retreadfed most recent post indicates the Council states that while many do some do not.  So if some do not why would they make an exception to accounting information for an IDIQ minimum?  It seems counter to their conclusion for requiring all the info for an other than IDIQ for traceability.  

 

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2 hours ago, C Culham said:

I still am conflicted that CO's obligate and almost conclude they simply sign a contract.   The comptroller obligates and records.  Why?   A CO could in fact sign an unauthorized commitment (something over their warrant level) and in such a case it is not an "obligation" until ratified. 

"Obligation A definite commitment that creates a legal liability of the government for the payment of goods and services ordered or received, or a legal duty on the part of the United States that could mature into a legal liability by virtue of actions on the part of the other party beyond the control of the United States."

COs create obligations (legal liabilities) within their delegated authority.

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22 hours ago, Jamaal Valentine said:

FAR does require it (the clear requirement- and exception to citing the accounting classification is for data elements in line items and subline items).

Please provide a cite.

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@napolik I don't remember what the 'it' was or what I was getting at ... I think I was referring to the FAR's requirement that contracting officers comply with all rules (laws, regulations, procedures, etc.); and the federal and DoD rules that require agencies to record the obligation of the minimum quantity at the time of contract award. Those rules have been cited several times in this thread (e.g., case law, GAO Redbook, DoD FMR). I don't think that's a controversial statement. Is it?

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On ‎6‎/‎6‎/‎2019 at 5:31 PM, Jamaal Valentine said:

I don't know why the FAR does not expressly require agencies to record the obligation of the minimum quantity at the time of contract award.

Jamaal, napolik was asking you to provide a FAR citation for the proposition that the FAR does require the recording of an obligation for the minimum quantity of an IDIQ contract at the time the contract is awarded.

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The FAR does not require the recording on the books of the agency of obligations for the minimum quantity of IDIQ contracts at the time the contracts are awarded because the FAR describes the acquisition process (and recording is not an acquisition process).  Recordings are done by agency comptrollers who follow financial management rules.  Recordings are required, but not because of the FAR.  My take-aways from this thread:

  • Contracting officers create obligations for minimums by executing IDIQ contracts; however, it is not necessary to include accounting citations to cover minimums in IDIQ contracts (FAR 4.1005-2(a)(1)).  [Note:  Contracting officers also distribute contracts to make sure other people (including agency comptrollers) know about them.  Distribution is supposed to occur within ten working days of execution (FAR 4.201).]
  • Comptrollers record these obligations on the books of their agencies upon receipt of the executed contracts.  Historically, it has been fine for recording to occur days or weeks after contract execution (obligation creation).  [Note:  No FAR citation is provided because recording is not an acquisition process covered by the FAR -- recording is governed by the Recording Statute and financial management regulations.]

Different agencies do some of these things in different ways.  For example, in some agencies, execution and distribution may be done electronically in automated systems.  In some agencies, contracting officers are expected to include accounting citations in IDIQ contracts. In some agencies, the contracting officer's automated systems are connected to the comptroller's automated systems.  And so forth.  Every contracting officer has to follow the rules of his or her own agency.

Even with a common FAR, there is great diversity in practice across federal agencies.  I support and embrace that diversity, and appreciate the learning that can occur with robust professional dialogue.

 

 

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20 hours ago, ji20874 said:

The FAR does not require the recording on the books of the agency of obligations for the minimum quantity of IDIQ contracts at the time the contracts are awarded because the FAR describes the acquisition process (and recording is not an acquisition process).  Recordings are done by agency comptrollers who follow financial management rules.  Recordings are required, but not because of the FAR.  My take-aways from this thread:

  • Contracting officers create obligations for minimums by executing IDIQ contracts; however, it is not necessary to include accounting citations to cover minimums in IDIQ contracts (FAR 4.1005-2(a)(1)).  [Note:  Contracting officers also distribute contracts to make sure other people (including agency comptrollers) know about them.  Distribution is supposed to occur within ten working days of execution (FAR 4.201).]
  • Comptrollers record these obligations on the books of their agencies upon receipt of the executed contracts.  Historically, it has been fine for recording to occur days or weeks after contract execution (obligation creation).  [Note:  No FAR citation is provided because recording is not an acquisition process covered by the FAR -- recording is governed by the Recording Statute and financial management regulations.]

Different agencies do some of these things in different ways.  For example, in some agencies, execution and distribution may be done electronically in automated systems.  In some agencies, contracting officers are expected to include accounting citations in IDIQ contracts. In some agencies, the contracting officer's automated systems are connected to the comptroller's automated systems.  And so forth.  Every contracting officer has to follow the rules of his or her own agency.

Even with a common FAR, there is great diversity in practice across federal agencies.  I support and embrace that diversity, and appreciate the learning that can occur with robust professional dialogue.

 

 

Appreciate the refinement but I believe further refinement is needed.   Please consider.....

In a read of the FAR nothing conclusive can be found that appropriation and accounting data shall not be shown on the face IDIQ contract award form in the block so designated for such information.

What is concluded by a read of the FAR is that "accounting classification" need not be on the contract line item number in a contract.  That is it.  By example we have concluded that if it were a DoD contract the bolded and underlined indicator in the below need not be shown on the IDIQ contract line items -

0001

NSN 1615-00-591-6620 Shim, Aluminum Alloy,... Apbl, Rotor, Helicopter PRON A1-9-63821-M1-M1 ACRN:AA

 

Further FAR does provide that a CO shall ensure that there is adequate appropriation  available for obligation (FAR 1.602-2(a)) and pursuant to references outside the FAR such as the GAO Redbook that the precise amount of the minimum will be recorded as an obligation within the time that the applicable appropriation is available for obligation and recording.

Based on this further refinement I would suggest that the following wording is more precise (proposed changes bolded) –

Contracting officers create obligations for minimums by executing IDIQ contracts; however, it is not necessary to include accounting classification to cover minimums in IDIQ contracts on contract line items(FAR 4.1005-2(a)(1)).  [Note:  Contracting officers also distribute contracts to make sure other people (including agency comptrollers) know about them.  Distribution is supposed to occur within ten working days of execution (FAR 4.201).]  

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Sorry, Carl, I can't reach that far.

You seem willing to admit that the accounting classification to support the contract minimum isn't required on a CLIN in an IDIQ contract (FAR 4.1005-2(a)(1)), but it seems you are still insisting that it appear on the award form, such as in blocks 25 and 26 of the SF-1449.  But if the valid and honorable reason described in FAR 4.1005-2(a)(1) prevents a contracting officer from including that data on a CLIN, it will also prevent him or her from including the data on the award page.  

There are federal agencies who leave the accounting classification and amount blocks blank for IDIQ contract awards (or in the accounting classification box they might enter something like "To be cited on orders issued under this contract," and in the amount block they enter "$0.00."  The contract minimum and maximum are spelled out in the schedule (or in the addenda for commercial item contracts).

Please don't say that those agencies are breaking the law.  They aren't.  Those agency comptrollers still comply with the law to record IDIQ minimums as obligations on the books of their agencies.  They're doing it differently that you are accustomed to seeing it done, that's all. 

Can we simply agree that contracting officers should follow the procedures established by their agencies?

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18 hours ago, ji20874 said:

You seem willing to admit that the accounting classification to support the contract minimum isn't required on a CLIN in an IDIQ contract (FAR 4.1005-2(a)(1)), but it seems you are still insisting that it appear on the award form, such as in blocks 25 and 26 of the SF-1449.  But if the valid and honorable reason described in FAR 4.1005-2(a)(1) prevents a contracting officer from including that data on a CLIN, it will also prevent him or her from including the data on the award page.  

(emphasis added)

Not by my read of the FAR. 

FAR subpart 4.10 applies specifically to contract line items, nothing more.  Reference 4.1000 "This subpart prescribes policies and procedures for assigning line items and subline items and their identifiers."    Your assertion of  "valid and honorable" reasoning is lost on me based on research and the clear reading of the FAR that represents a standard that is to be used by agencies for contract line items only.   To the former in a review of  IDIQ solicitations/contracts in FBO.gov they do not provide the "minimum guarantee" for an IDIQ stated and shown in the schedule as a contract line item.  Rather agencies state the minimum guarantee in some sort of statement similar to  - "The Government shall order at least the quantity of supplies or services designated in the Schedule as the "minimum", "Contract award will have a minimum guarantee of $5,000 for the life of the IDIQ contract."  As you very well know in most if not all IDIQs the Contract Line Items are a listing from which the agency may order the supplies or services at the stipulated pricing arrangements.  Ergo the statement in FAR 4.1005-2(a)(1) that accounting classification "is not known at time of issuance of an indefinite-delivery contract."   Counter to this fact it is clear from  this discussion thread that appropriation, apportionment, commitment of specific monies is known and must be known at the time of a IDIQ contract award because even you have stated that with regard to minimums "Comptrollers record these obligations on the books of their agencies upon receipt of the executed contracts."  Please correct me but I do not think even you would award an IDIQ contract without knowing that there is appropriation available for obligation.   And if you would please tell me, by example, when you have.

Further your statement in and of itself is conflicted.  First you provide that reasoning from preventing a CO from putting appropriation and accounting data on a IDIQ for the minimum is the CO's valid and honorable interpretation of FAR 4.1005-2(a)(1)), then you want me to agree that CO's should follow their agencies processes.   I mean really what is it some fumbling assertion on your part or a fact that agency policy is the best approach.

I understand and agree that you and I disagree that the appropriation and accounting should be shown on the face of a IDIQ contract award document in the appropriate block.  I never said leaving it off was "breaking the law" and I implore you to not imply or say that I did.   I will leave it at that.  

It may or may not be agency policy either way but I disagree with your appeal to "valid and honorable reason" to leaving it off as such an assertion is not true to FAR conventions.

 

 

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This discussion has gone on long enough. PepeTheFrog needs to clear something up for those of you who don't understand what's going on. 

If you need to justify your possibly incorrect opinion, simply use the phrase "valid and honorable."

That is an official, definitive source. It's the end of the line. 

What is the controversy here, people? Can you not read "valid and honorable"? 

In the future, if your possibly incorrect opinion is demolished by logic, reality, law, regulation, court case, or written policy document, you simply pull out the trump card: valid and honorable. Do not bother to change your opinion or acknowledge that your opinion is incorrect or improper. Under no circumstances should you admit you were wrong or have learned something. That would be bad form.

Say it with PepeTheFrog: "valid and honorable."

These are the rules; PepeTheFrog didn't write them. 

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14 minutes ago, Don Mansfield said:

How do you interpret the use of bold red font?

Font in bond and colored red is what's known as "persuasive authority," as opposed to mandatory authority. If the information is in bold, red font, you may or perhaps should follow such persuasive authority, but it is not binding.

For contrast, an example of mandatory authority or binding authority is something like "valid and honorable." There is no choice there, folks. No choice! 

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2 hours ago, C Culham said:

I understand and agree that you and I disagree that the appropriation and accounting should be shown on the face of a IDIQ contract award document in the appropriate block. 

Carl, I don't think the question is whether appropriation data "should" be shown on the face page of an IDIQ contract.  The question is whether it is required to be shown there.

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It’s not me that makes it valid and honorable — please read FAR 4.1005-2(a)(1).  That is what makes it valid and honorable.  Those circumstances exist in some agencies, and contracting officers in those agencies don’t include an accounting citation for the minimum in IDIQ contracts.  I cannot bring myself to be so arrogant as to say that entire agencies, and all the contracting officers in those agencies, are wrong — especially when the FAR expressly says what it expressly says.

If your agency requires you to include an accounting classification (funds cite) to cover the minimum in your IDIQ contract, then you must do it — but let’s recognize that not all agencies do.  I’m all in favor of diversity and professionalism.  Each contracting officer has to follow the rules of his or her agency.

 

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3 hours ago, PepeTheFrog said:

In the future, if your possibly incorrect opinion is demolished by logic, reality, law, regulation, court case, or written policy document, you simply pull out the trump card: valid and honorable. Do not bother to change your opinion or acknowledge that your opinion is incorrect or improper. Under no circumstances should you admit you were wrong or have learned something. That would be bad form.

Phew! What an amazing Amphib!

Let me hop onto another quote:

Quote

Frogs seem to have some pretty powerful superhero properties. Not only are they full of amazing traits that can be explored for medicinal purposes but they also help keep pest populations under control.  Without frogs, our lives would be a lot different, and not in a good way. So show some love for our frogs. They have our best interests at heart. We should do the same for them.

http://amphibianrescue.org/2012/12/06/superhero-qualities-in-frogs/

 

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3 hours ago, ji20874 said:

I’m all in favor of diversity and professionalism.  Each contracting officer has to follow the rules of his or her agency.

 

Works for me...I like it!

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10 hours ago, C Culham said:

Please correct me but I do not think even you would award an IDIQ contract without knowing that there is appropriation available for obligation.   And if you would please tell me, by example, when you have.

@ji20874.......Still waiting.

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8 hours ago, Retreadfed said:

Carl, I don't think the question is whether appropriation data "should" be shown on the face page of an IDIQ contract.  The question is whether it is required to be shown there.

Yes it is!  As I suggested early on  show me what "shall" valid and honorable guidance there is to or not to complete blocks 1 through 24 of a SF 1449?  Once there then lets discuss block 25.

Thank you!

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This has been an interesting thread.  I found a related GAO decision looking for something else and came back here to post.  According to this decision, not only must the guaranteed minimum be obligated at time of award, it must reflect an actual bond fife need of the agency in the current fiscal year.  So I was wrong when I said all it took was the finance office to just record an obligation.  The obligation must be for a current and actual need which would include detailed accounting data.

https://www.gao.gov/assets/400/392952.pdf

My error and thanks everyone for setting me straight.

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13 hours ago, C Culham said:

Yes it is!  As I suggested early on  show me what "shall" valid and honorable guidance there is to or not to complete blocks 1 through 24 of a SF 1449?  Once there then lets discuss block 25.

Carl, you are avoiding the issue.  If you contend that a fund citation must be included on the face page of an IDIQ contract, you must have some regulatory or statutory authority to support that contention.  All that I am asking is what is the authority that requires this?  I have been doing this for over 45 years, mostly with DoD, and do not recall ever having seen a fund citation on an IDIQ contract.  Has DoD been doing this wrong for all these years?  If so, based on what regulation or statute?

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Formerfed, a slight correction:  funds are obligated with a companion recording of the obligation for the minimum quantity.  However, this is done as an accounting transaction without a funds citation on the contract document.

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