FAR 32.702: Adequate Funding

Comptroller General - Key Excerpts

The protester asserts that the agency is violating the Antideficiency Act because it is requiring the contractor to commence performance prior to placing an order under the contract and obligating funds for that order. In the alternative, the protester argues that the agency is contemplating accepting voluntary services, which is also an Antideficiency Act violation.

These arguments have no merit. First, with respect to the obligation of funds, the Antideficiency Act provides that an officer or employee of the United States may not “make or authorize an expenditure or obligation exceeding an amount available in an appropriation or fund for the expenditure or obligation [or] involve [the] government in a contract or obligation for the payment of money before an appropriation is made unless authorized by law.” 31 U.S.C. § 1341(a) (2012); see e.g., Antideficiency Act--Applicability to Statutory Prohibitions on the Use of Appropriations, B-317450, Mar. 23, 2009. Here, in contrast, the protester does not allege that the agency obligated or expended funds in advance or in excess of available appropriations. Indeed, the essence of JRS’s prior argument was that JRS would be required to undertake preparations to perform even though there was no contract minimum and the agency was not obligated to issue an order or otherwise reimburse JRS for the costs of preparation. Since the protester’s allegations do not demonstrate that the agency is making an award in excess of an available appropriation, they provide no basis to question the agency’s actions.

Second, with respect to the acceptance of voluntary services, the Antideficiency Act provides that an officer or employee of the United States may not “accept voluntary services . . . or employ personal services exceeding that authorized by law except for emergencies involving the safety of human life or the protection of property.” 31 U.S.C. § 1342. This prohibition “contemplates service furnished on the initiative of the party rendering the same without request from, or agreement with, the United States.” 7 Comp. Gen. 810, 811 (1928). Where, as here, however, services are furnished pursuant to a formal contract, they are not voluntary within the meaning of the Antideficiency Act. Id.; General Services Administration; Real Estate Brokers’ Commissions, B-291947, Aug. 15, 2003. Accordingly, the services performed by the vendor who is awarded the contract do not qualify as “voluntary services” under the Antideficiency Act since the obligation to perform those services arises pursuant to contract.  (JRS Staffing Services, B-408202, Jul 16, 2013)  (pdf)

Comptroller General - Listing of Decisions

For the Government For the Protester
JRS Staffing Services, B-408202, Jul 16, 2013  (pdf)  

U. S. Court of Federal Claims - Key Excerpts

To determine adequate funding, plaintiff makes its own calculations based on the O’Halloran estimate. Plaintiff argues that the agency should have added contingency and impact costs to the O’Halloran estimate to arrive at the proper amount of funding. Since the O’Halloran estimate listed 7 “0% contingency” costs, plaintiff adds to that estimate 7.5 percent in contingency costs and $50,000 in impact costs for a total estimate of $3,915,819. With the addition of design costs as originally estimated by the agency at $406,394, the total project cost, according to plaintiff, is $4,322,213 which exceeds the $4,000,000 maximum the agency could spend for Minor Construction Projects. First Am. Compl. ¶ 21. Plaintiff claims, therefore, that the agency’s request and receipt of $3,916,584 in allocated funds for the project was not adequate funding. The court disagrees. Plaintiff’s contentions wholly fail to prove that the agency did not provide adequate funding for the project. And perhaps even more important, while plaintiff maintains that the agency was required as a matter of law to rely on the O’Halloran estimate, it simply provides no support for this proposition. Tr. of Oral Arg. at 47: 10-16. Plaintiff, therefore, has neither provided a valid counter to the claim that the agency set aside satisfactory funding nor offered a justification for a court foray into the guarded realm of agency management decisions. More specifically, the agency budgeted $3,551,000 for the construction portion of the project. (Ironically, this figure is only 1 percent lower than the O’Halloran estimate of $3,596,111 for the main bid item. This in itself sheds doubt on plaintiff’s assertions.) Although plaintiff tacks on contingency and impact costs to the O’Halloran estimate, it does not cite to, nor does the court know of, any law requiring the agency to include these costs in the project budget. For that matter, the agency’s allocated funding for the project construction was sufficient to even satisfy the O’Halloran estimate for alternate bid items 3, 4 and 5. The agency would surely have liked to have awarded the contract for the main bid item, but it acted reasonably in issuing the Solicitation with ample funding for three of the alternate bid items. Simply put, the court finds that the Solicitation rationally furthers the agency’s balancing of two competing administrative concerns: a desire to purchase an ideal construction project and a limited budget. Such considerations often form the basis of agency management decisions, and plaintiff has not proffered one cogent reason for the court to interfere with the agency’s decision. In sum, plaintiff has not shown that the agency was required by law to base its funding request on the O’Halloran estimate. Nor has it demonstrated that the agency’s estimate for the project was arbitrary and capricious or contrary to law. (First Enterprise v. U. S., No. 04-0082C, June 25, 2004) (pdf)
U. S. Court of Federal Claims - Listing of Decisions
For the Government For the Protester
First Enterprise v. U. S., No. 04-0082C, June 25, 2004 (pdf)  


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