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Funding Issue- Quick Question


PATRICK3

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Having a discussion about this in the office...

If you have non-severable work, can you fund it with annual one year funding longer than one year? Meaning, can I use one year funding for non-severable work on a contract for 5 years straight with no options? Severable work can obviously be no longer than 12 months but what about non-severable? This is more about the funding, rather than severable or non. It's a FFP and T&M CLIN structured contract. 

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You can't separate the question about funding from the attribute of being severable vs non-severable. The answer to the funding question related to annual funds used beyond 12 months depends on the attribute of being severable or non-severable. If it is non-severable, annual funding can be extended beyond 12 months in order to support delivery of the tangible benefit. Non-severable services indicate that the Government would not receive a tangible benefit until the defined end-state is delivered. The nature of T&M is that there is no defined end-state, they are severable services by definition. Yes, annual funds can be used for non-severable services well beyond 12 months, if that is how long it takes to obtain the defined end-state. No, annual funds cannot be used beyond 12 months for severable services. 

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4 hours ago, Misty said:

The nature of T&M is that there is no defined end-state, they are severable services by definition. 

This is not a true statement.  T&M contracts can be used for supplies or services.  In either event, the object of the contract is to have the contractor accomplish a definable task.  Some of these tasks may involve severable services, while others may involve non-severable services.  There is no hard and fast rule on this.  A classic example of a T&M contract is when I take my car into s shop to have it repaired.  The mechanic gives me an estimate of the parts and labor needed to do what is apparently necessary to fix the car.  The work order I sign requires the mechanic to get my permission if the work will cost more than the estimate.  Obviously, this is a non-severable task to be performed on a T&M basis.

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20 hours ago, Retreadfed said:

This is not a true statement.  T&M contracts can be used for supplies or services.  In either event, the object of the contract is to have the contractor accomplish a definable task.  Some of these tasks may involve severable services, while others may involve non-severable services.  There is no hard and fast rule on this.  A classic example of a T&M contract is when I take my car into s shop to have it repaired.  The mechanic gives me an estimate of the parts and labor needed to do what is apparently necessary to fix the car.  The work order I sign requires the mechanic to get my permission if the work will cost more than the estimate.  Obviously, this is a non-severable task to be performed on a T&M basis.

That makes sense with regard to identifying an end-state but still not having an ability to accurately estimate the extent or duration of the work or to anticipate costs with any reasonable degree of confidence for services which require diagnostic evaluation and repair type work. We always handled these as UCAs with FFP contract type. I am used to relying on T&M when we don't have a clearly defined end-state but I can see how that may not always be the case. 

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22 hours ago, Misty said:

That makes sense with regard to identifying an end-state but still not having an ability to accurately estimate the extent or duration of the work or to anticipate costs with any reasonable degree of confidence for services which require diagnostic evaluation and repair type work.

I was using the example I did to make the point that T&M contracts do not always involve severable services.  They can certainly be used to acquire non-severable services that do not require diagnostic evaluation and repair work.

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