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Purchase Request Approval Option period Funding

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I work at a private company, and we are a prime contractor holding a US government IDIQ.  We were awarded a CPFF task order recently under this IDIQ, it was a base year with two (2) one year Options. Our total proposal including option pricing was accepted by the government and we are fully funded for the base year.

We have a subcontractor along for the ride with us for base year and options too (if exercised).  I know my question is possibly per my company's policy, or it's possibly CPSR compliance  or a best practice answer I am looking for, but if the authorization document (purchase Req) within our company was approved for base year and approved for both options, is there a problem with that? The base year has activated charge codes in our MRP system and SubK is fully funded for base year ONLY.  The Option approved funding could only be committed if:  1) the government exercised the option at prime level.  2) the finance and accounting codes would need authorized and created into the MRP and PO system.

 neither the finance accounting codes for option periods  are active or authorized, at this time, obviously thebase year just underway, however the  total funding for the SubK, by the program manager is approved.  

 

 

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My opinion is that the better practice would be for the requisition to be generated at a time after the option is exercised by the Government:

1. System wise, it could currently look like there is an open commitment to purchase and the purchasing function is not doing its job, which also may cause an inaccurate financial picture for your company.

2. There may be changes in the option along the way. I question whether your company's system would be triggered to "approve the option changes" with another requisition.

3. It seems commitment awkward for finance to "have to remember" to go back into the system and authorize funding commitment for an "old" requisition...those activities should to me be triggered by a requisition that goes to its queue and is taken care of at that time. 

I believe you are doing a good thing questioning the current process and commend you for your thinking.

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