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Incremental Funding Across Fiscal Years
Troy64 posted a topic in Contract Award ProcessOur agency has a long-standing policy of allowing incremental funding across fiscal years. As an anecdote, we had this one requirement for chaplain services that began 1 Sep 16, ends 31 Aug 17, and the RA only wanted to provide 2 months of FY16 OMA funds, intending to fund the other 10 months with FY17. Am I crazy, or doesn’t this violate the ADA by obligating the government in advance of funding? As the KO, I pushed back, requesting full funding or a change to the base period to match available funding. The RA was not pleased, nor was our management. We’ve been going back and forth for months and still are, prompting the RA to provide the full funding to ensure award by 30 Sep 16. But the fight is still on; management won’t rescind this policy, stating that we have to help the RA with their budget difficulties. Agency regulation requires management to report even *suspected* cases of ADA violations to HQ, but they won’t. I’ve bounced this off of other KOs for a reality check; they all agree that it is an ADA violation. As fish don’t know they’re wet, do we not know we’re wrong? Our legal counsel cites FAR clause 52.232-18 as authority; we disagree. Who’s right?
Hello WIFCON! Would love some input here from any knowledgeable folks about this... I am an Army PCO tasked with negotiating a request for equitable adjustment (REA) on a fixed price commercial contract for severable services that I recently inherited from a predecessor PCO. It's $5.6M, five year contract (base + four option years). The initial award was about two years ago--we are currently in the first option year. Shortly after award, during the base year, the Government realized it had vastly underestimated the magnitude and needed additional performance out of the contractor, and so the contract was modified (five times over the course of the first two years) to pull forward performance scope from the out years. So now the contractor has submitted an REA for additional OH costs related to administrative burden and greater than anticipated subcontracting costs in order to meet accelerated deadlines. The REA amount is significant, and the circumstances are much more complicated than what I'm able to provide in this forum, but, basically I've determined the REA has merit, and I'm trying to write up my merit analysis and price negotiation memo. I have a few questions I'm hoping someone can help me with. THANKS! SCOPE: As I said, I'm inclined to determine the REA has merit, but my analysis leads me to believe that we're dealing with an out of scope change. I say this after reviewing the Contract Attorney's Deskbook (Chapter 21), which outlines several factors to consider for scope determinations. Ultimately, to me the cumulative effect of all the prior changes may have constituted a "cardinal change". If that's the case, what's the change authority I'd use for the modification? In my experience, typically out of scope changes require a J&A, and with a J&A I'd use the applicable J&A authority as my mod authority--but that doesn't make sense since this is an REA, right? I'm not going to write up a J&A for all the contract changes that ALREADY happened am I? (Seems to me the modification associated with the negotiated REA is only to equitably adjust the contract as a result of the constructive changes leading up to this point.) Often I use the changes clause 52.243-1 as my modification authority, but it's my understanding that the changes clause 52.243-1 is only good for WITHIN-SCOPE changes. And since this is an REA and not a claim (yet, at least), using the disputes clause 52.233-1 wouldn't be correct either. So what do I put in the SF-30? FUNDS: I assume the fiscal law associated with an REA is the same as any other modification? I.e. Within scope modifications use award year money and out of scope modifications use current year money? Other related details: each of the aforementioned modifications were done bilaterally. The contractor signed each SF30 without a price proposal, but all along he was corresponding with the PCO and COR that he felt the contract scope was creeping larger and larger and as a result he was facing cost impacts he hadn't anticipated.
I'm an Army 1102 tasked with awarding a modification to a services contract that affects price. I've encountered a bit of a funding dilemma and I'd appreciate anyone's input on this. My interpretation of the circumstances and the pertinent statutes/regs/rules/etc is that if the KO determines this modification is in-scope then the obligation must utilize award year money. Conversely if the KO determines that the mod is out-of-scope, then current year funds may be utilized--but there must also be a J&A documenting why the work isn't newly competed. There are differing opinions. Any thoughts? CONTRACT DETAILS: The contract is firm fixed price for commercial, "severable" type services for a military customer. It was competitively awarded. The contract's period of performance is one base year (9/2012-9/2013) plus one option year (9/2013-9/2014) in the total amount of ~$10M (incl base + option). The base contract was awarded in Sept 2012, obligated with FY12 O&M funds. The option exercise for the additional year was exercised in Sept 2013, obligated with FY13 O&M funds. MOD DETAILS: The mod is for new, additional work. Whether this work is in-scope or out-of-scope is still under debate. It's definitely related to the work in the original PWS but I personally I believe it's outside the scope (under the criteria cardinal change rule, material change, etc.). The contractor has proposed ~$200k for the mod. Currently, the funds provided are split 75/25 among FY14 and FY13 funds. PERTINENT REGS, RULES, ETC.: The following references have been consulted. FAR Subpart 32.7, Contract Funding - 32.703 provides statues that permits agency heads to fund contracts crossing fiscal years with annual appropriations DFARS 32.7, Contract Funding - 232.703-3 provides 10 USC 2410a as the applicable statute. FAR Part 43 Modifications - silent on the topic DFARS Part 43 Modifications - silent on the topic FAR Part 6 - 6.001 states CICA requirements apply to mods not within the scope of the original contract 2013 FISCAL Law Deskbook - Ch. 3, Sect. VII Use of Expired Funds, Paragraph B Contract Modifications Affecting Price: Subparagraph 1(a) "When a contract modification does not represent a new requirement or liability, but instead only modifies the amount of the government’s preexisting liability, then such a price adjustment is a bona fide need of the same year in which funds were obligated for the original contract." - I.E. IN-SCOPE mods mut use award year funds Subparagraph 1(b )(1) “In general, increases to the quantity of items to be delivered on a contract are viewed as outside the scope of most changes clauses. Thus, a modification to increase quantity will amount to a new obligation chargeable to funds current at the time the modification is made.” - I.E. OUT-OF-SCOPE mod can use current year funds but this would require a J&A IAW FAR 6.3 Subparagraph 1(b )(5) “Severable Services: A modification providing for increased additional deliverable services must be charged to the fiscal year or years in which the services are rendered… Note: In dicta, GAO has suggested that an increased services modification to a contract awarded for 12 months under 2410a would relate back to the funds initially placed on the contract. See GAO Redbook, Volume I,Appropriations Law, page 5-34 (2008). - I.E. this is a gray area but it appears GAO rules that OUT-OF-SCOPE mods for severable services also require award year funds GAO Redbook - Volume I, Appropriations Law, Sect 9a (page 5-44) “10 U.S.C. § 2410a authorizes the military departments to use current fiscal year appropriations to finance severable service contracts into the next fiscal year for a total period not to exceed 1 year” - I.E. the Redbook explains the intent behind the DoD Severable Services permission but is silent whether to use award year or current year funds for an in-sope mod. WIFCON, "Bona Fide Needs Rule" - "…a within-scope price adjustment, which is requested and approved in a subsequent fiscal year [subsequent from the current contract obligation], for example, under the “Changes” clause, will... be charged against the appropriation current at the time the contract was originally executed." - I.E. IN-SCOPE mods mut use award year funds