So I understand you cannot use unearned award fee to fund another award period, but could you use it to fund other new incentives?

In FAR 16.401(e)(4) and the RFO (Overhaul) at 16.402-2(d) I see no distinction regarding the limitation regarding what I will call purpose of use of rollover.

I'm not sure I understand your question. You talk about funding. I usually think of funding in the context of obligating appropriated funds to pay for work covered by a contract. Is that what you are asking about or are you asking something else?

• Prohibition on rollover: FAR 16.401(e)(4) explicitly prohibits the rollover of unearned award fees.

• Purpose: The prohibition is in place to ensure the award fee remains an effective tool for incentivizing performance during each specific evaluation period.

Sorry if my question was not clear. Am I able to re-allocate unearned award fee for a different incentive, such as adding a schedule incentive.

1 hour ago, Subcontracts Gal 0820 said:

Sorry if my question was not clear. Am I able to re-allocate unearned award fee for a different incentive, such as adding a schedule incentive.

Sorry I may have confused the issue with regard to rollover. This said I do have to point out the definition at FAR 16.001 and in the RFO FAR at 16.001. I am doing so because I am still confused about "rallocation" versus "rollover"as it seems inyour specific instance you might be using the former when you mean the latter.

This said does this help?

Here is a dated reference (second link below) noting that the FAR language about rollover was added to the FAR in 2009. Here is reference noting when the language was added to the FAR and I note it remains pretty much the same in the RFO. https://www.federalregister.gov/documents/2009/10/14/E9-24579/federal-acquisition-regulation-far-case-2008-008-award-fee-language-revision

https://www.gao.gov/assets/gao-09-630.pdf

See Page 10 of this GAO document. https://www.gao.gov/assets/gao-09-630.pdf It states this - "The portion of the award fee that may be paid depending on the evaluation of contractor performance is generally tied to a period of time. As shown in figure 4, award fee that is not awarded is referred to as unearned fee and can either be returned to the program for use within the scope of the contract, returned to the Treasury to be appropriated elsewhere, rolled over to be used as award fee in a subsequent period, or used by the agency if it is still available for obligation. Before an award fee period, fees can be reallocated or moved from one evaluation period to another for reasons such as government-caused delays. The key difference between reallocation and rollover is that the contractor has not had a chance at earning reallocated dollars while the contractor has a second chance to earn rollover dollars after having failed to perform well enough to earn them initially."

All said your question in part enters into considerations of bona fide needs rule.

I am not saying yes or no but hope what I have offered helps you determine for your specific contract if you are in a position of reallocate or if you are in the world of rollover.

This is super helpful, thank you!

Excellent response and explanation, Carl!

13 hours ago, formerfed said:

Excellent response and explanation, Carl!

Thank you (I am sorry about the typos however)