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Modification of Contract


Kristin3

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Hi all!

Brand new to the website. I have a request to use FY 19 O & M funds to modify an in-scope contract from FY 18.

I don't think they can use funds FY 19 O & M funds for this project, but how would they fund this project? If something was unexpectedly found which qualified as a differing site condition, would they be able to use FY 19 funds for a FY 18 project?

 

Thanks!

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 I don’t know what organization you are with. However,  If there are still FY 18 funds that haven’t been obligated, they remain available for obligation for in-scope modifications. There are DoD procedures for requesting and providing those funds. 

You would use current year funds only if the Army, for example, had no remaining  FY 18 funds to make available.  

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Am on road at moment. I’m sure someone will provide the citation from the FInancial Management Regulations if you are with DoD. 

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2 minutes ago, Kristin3 said:

Yes, it is with the Army!

OK then your finance and accounting office should be able to take care of that   Please note that installations will often claim that there are no funds available. However they have to go up to Army level to seek those funds. Use to happen all the time with us.

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See Volume 3 Chapter 8. I’m having some difficulty locating the exact paragraph for funds that have expired for new obligations but remain available to fund in-scope changes.  %#?## IPhone 😃

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Ok sorry, Kristin.  I should have referred you to the GAO Redbook. “Principles of Federal Appropriations Law” 

see Volume 1 , Chapter 5,  “Availability of Appropriations - Time” I suggest reading through the whole Chapter for overall knowledge.

However, you want to know what funds to use for in-scope changes to a construction contract funded with prior year funds which is being performed during subsequent FY, after the original funds expired for new obligations. 

Your example was a differing site condition, but could also be other in-scope changes to the plans or specs - not additional scope.

You will see that once Annual O&M appropriations expire for the purpose of new obligations, the appropriation remains  available for in-scope modifications for a period of five years. 

Look at B. “The Bona fide Needs Rule” -7- “Contract Modifications and Amendments affecting Price.”

Look also at D, “Disposition of Appropriations Balances”, 3. “Expired Appropriations Accounts”, for discussion concerning the life of the accounts and what to use if the funds are no longer available during or after the five year period (I.e., the account is exhausted during or has been closed afterwards). You then use current year funds available for the same purpose or other expired funds that are still available for the same purpose.

The DODFMR provides specific accounting instructions but doesn’t clearly explain that in-scope modifications are antecedent obligations, not “new” obligations. I found the references to five year period of availability for existing obligations for expired funds in numerous Chapters of the FIRMR. I just couldn’t find anything there that specifically discussed in-scope mods being “existing obligations”.

Hope this helps. 

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Kristin, the GAO Red Book is available online

(Volume I, Chapter 5, B 7; and D 3)

 

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Kristin, you don’t appear to be understanding what the Red Book, Bob’s summary and I are saying.

FY18 funds are still available (not expired) for obligating in-scope mods to an FY 18 funded contract. After 30 September 2018, they are NOT available (expired) for NEW obligations. 

in fact, generally, FY 18 funds would be THE funds that you must use for an in-Scope mod - NOT FY19 funds. 

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2 minutes ago, joel hoffman said:

Kristin, you don’t appear to be understanding what the Red Book, Bob’s summary and I are saying.

FY18 funds are still available (not expired) for obligating in-scope mods to an FY 18 funded contract. They are NOT available (expired) for NEW obligations. 

in fact, generally, FY 18 funds would be THE funds that you must use for an in-Scope mod - NOT FY19 funds. 

I have confused myself beyond belief and the client had asked us for the wrong thing. I know they need FY 18 funds for the in-scope modification, but they are specifically asking for O & M funds so I wasn't sure if that was included in these type of funds despite the handbook saying they expire one year after appropriation.

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Ok -  is the original contract funded with the same type funds as they are providing? 

If so - they are not expired for in-scope modifications. Is the mod an in-scope or is it for additional, new work that is “out of scope?

EDIT: FY18 O&M funds remain available until 30 September 2024 for IN-SCOPE mods to an FY 18 O&M funded contract.  BUT - your legal and F&A resources are supposed to know the answer and advise you. 

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26 minutes ago, Kristin3 said:

but they are specifically asking for O & M funds so I wasn't sure if that was included in these type of funds

Was there a typo? I’m not following you... can you please clarify 😊

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3 hours ago, joel hoffman said:

Ok -  is the original contract funded with the same type funds as they are providing? 

If so - they are not expired for in-scope modifications. Is the mod an in-scope or is it for additional, new work that is “out of scope?

EDIT: FY18 O&M funds remain available until 30 September 2024 for IN-SCOPE mods to an FY 18 O&M funded contract.  BUT - your legal and F&A resources are supposed to know the answer and advise you. 

Yes, the original contract was with O & M and now O & M funds are requested again. It is also an in-scope. 

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23 minutes ago, Kristin3 said:

Yes, the original contract was with O & M and now O & M funds are requested again. It is also an in-scope. 

Okay! So are we in sync now? 

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6 minutes ago, joel hoffman said:

Okay! So are we in sync now? 

Yes! I'm sorry I completely missed one of your posts earlier. 

 

So just to confirm contract was awarded in FY 18 with FY O & M 18 funds, requesting funds for an in-scope modification. They should use FY 18 O & M funds for in-scope modification which are available for five years. 

 

O & M funds only expire after 1 year for NEW obligations (aka out of scope obligation would be a new obligation) 

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Just now, Kristin3 said:

Yes! I'm sorry I completely missed one of your posts earlier. 

 

So just to confirm contract was awarded in FY 18 with FY 18 funds, requesting funds for an in-scope modification. They should use FY 18 O & M funds for in-scope modification which are available for five years. 

 

O & M funds only expire after 1 year for NEW obligations (aka out of scope obligation would be a new obligation) 

👍👍👍👍👍👍👍 (“LIKE”!)

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Could be repair, minor construction, roofing, pavement repairs, electrical or HVAC or a myriad of other types of work. 

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33 minutes ago, joel hoffman said:

Could be repair, minor construction, roofing, pavement repairs, electrical or HVAC or a myriad of other types of work.

Yes, it could be a lot of things that we can speculate about.  However, since this is a beginner forum, it would be a learning experience for Kristin to be able to answer that question.

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