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Worlbird

CR and recurring services

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Just curious to see what other agencies are doing in regards to recurring services (ie utilities, phone service) when funding. Some do a full year with the availability of funds clause while others fund as each CR passes.

So how do you handle these types of things?

Thanks in advance!

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I know of one Department that got an opinion a long time ago from their General Counsel that it's okay to write orders without any contingency language. According to that opinion, Congress intends to ultimately fund the operations for the full year and the CR's are just a temporary delay. So orders are written for a full year but the Comptroller/CFO just obligates funds proportionally for the CR. That keeps the CO from having to do a series of amendments.

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I know of one Department that got an opinion a long time ago from their General Counsel that it's okay to write orders without any contingency language. According to that opinion, Congress intends to ultimately fund the operations for the full year and the CR's are just a temporary delay. So orders are written for a full year but the Comptroller/CFO just obligates funds proportionally for the CR. That keeps the CO from having to do a series of amendments.

formerfed,

I have a problem with that practice. If the contract makes the Government liable for the entire year, then an obligation has been created for the entire year. The Comptroller's underrecording of the obligation does not change the Government's actual obligation. I don't think this complies with GAO's interpretation of the Recording Statute. I would not follow that Counsel's advice.

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I certainly agree that the approach raised in the second post of incurring an obligation and later funding it would be a classic case of an obligation in advance of funding, a potential ADA violation.

However, while potentially poor financial management, if the activity has sufficient current funds to cover the entire year (i.e., enough dollars), incurring an obligation and fully funding that obligation for an entire year for these recurring utility services, while under a Continuing Resolution, doesn't seem to me to be inconsistent with fiscal law. See, e.g., the Red Book, at 8-15:

Thus, under a resolution with a duration of one month, and which appropriates funds at a rate for operations not in excess of the current rate, the agency is not necessarily limited to incurring obligations at the same rate it incurred them in the corresponding month of the preceding year if the agency can establish that it is operating under a flexible plan that would enable continuation of activities throughout the fiscal year.

I understand the period of availability of funds under a CR is controlled by the CR (see Red Book, 8-35 - 8-38). Even if obligational availability would be less than a year, doesn't the authority under 10 USC 2410a and its civilian equivalent for severable services remain under a CR? What am I missing?

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Jacques,

I think the issue is the administrative burden of having to issue purchase/delivery order amendments and contract modifications to "incrementally" fund actions over the course of a year. A small to medium size procurement office may have a couple thousand orders and many contracts for services and supplies. So instead of issuing orders and contract actions for an entire year, they are forced to fund them for the portion of the CR. If there are several CRs, that's a lot of work. If they aren't done timely, the trickle down effect is contractor invoices aren't paid on time. In addition invoices often get rejected because they might bill for more than the order value.

Sure, orders can be funded for more than the CR amount but that isn't the problem. Usually it's the agency doesn't have enough money to fund everything.

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However, while potentially poor financial management, if the activity has sufficient current funds to cover the entire year (i.e., enough dollars), incurring an obligation and fully funding that obligation for an entire year for these recurring utility services, while under a Continuing Resolution, doesn't seem to me to be inconsistent with fiscal law.

I agree with that.

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