Budget Authority Issue?

[ConMan411]

Scenario:  Competitive Single award CPAF contract, Base +4 Option Periods.  Mostly services but does have ceiling lines for ODCs, Travel, Materials, Labor, Award Fee at the contract level for each period separated out.  Task Orders are issued against the contract, each Task Order has their own funding sources (so no co-mingling between TOs allowed).  The owners of those funding sources are the ones required to "go find and certify their funds" - not the CO.  Certain events happened and the government directed personnel to travel more than proposed, which increased the travel and ODC costs.  The funding was always certified before costs were incurred. 

Concern: The contract level ceiling for those lines of travel and ODC have been surpassed, whereas the CO is just converting the ceiling from the labor to these lines with each incremental funding action at the contract level, without a proposal from the contractor, and after certified funding is received. At the top-level contract, there is a chart that shows what is the remaining value in that option year on each cost line, where normally is shown just a "From" "By" "To" chart, is now a "From" "By" By Realignment" "To", essentially realigning a portion of labor option value into ODCs and Travel.  It is known the contractor needs increases in those lines (we are halfway into an option period), and eventually the labor ceiling will run out and there will not be any labor left, but I am not sure what regulation I can lean on to get the CO to stop doing this conversion; or find one that allows for it to happen.  

Request: I like to walk the straight and narrow line, so this does not sit well with me. Am I being overly conservative or is there regulation that may help encourage the CO to make the necessary changes to the contract level ceilings based on the current known needs?  The best I could find is that it may scrape against Budget Authority (Contract Authority)? 

[Vern Edwards]

When you say funding was "certified," do you mean that a finance office had certified that funds were (1) available and (2) had been reserved for a particular acquisition?

When you say "converting the ceiling," do you mean reducing the ceiling for one purpose and increasing the ceiling for another?

Are all the funds from the same long-line account?

If the answers to those questions are yes, why do you worry that what you described might be improper?

Have you discussed this with the certifying accounting and finance office? If not, why not? 

What have you read about budget authority and obligation authority (not "contract authority")?

[Retreadfed]

ConMan411, you talk about task orders being issued with their own funding and at the same time you talk about incremental funding at the contract level.  What type of contract do you have, e.g., IDIQ, requirements, etc.?  Why do you have funding at the contract level and task order level?  I'm confused.

[ConMan411]

Thank you for the questions, Vern.  The best question that I think you asked was if it was all on the same account line - which I know as fund cites - which would be certified through the certifying office.  I think that is the thread for me to pull and if it is all on the same line. I will be looking into this today and this insight is very much appreciated.

1. When you say funding was "certified," do you mean that a finance office had certified that funds were (1) available and (2) had been reserved for a particular acquisition? Yes and Yes

2. When you say "converting the ceiling," do you mean reducing the ceiling for one purpose and increasing the ceiling for another?

Yes and Yes (There are ceilings for each line or bucket (labor, material, travel, etc.)

3. Are all the funds from the same long-line account?  I am going to verify this!!

If the answers to those questions are yes, why do you worry that what you described might be improper?  I am going to verify the previous question. 

Have you discussed this with the certifying accounting and finance office? If not, why not?  I do not have access to that office as a contractor. 

What have you read about budget authority and obligation authority (not "contract authority")?  I was reading GAO-16-464SP. Maybe it is not applicable to my situation, which is why I posted, but it was the closest written anything I could find for my situation. How this is being handled does not quite pass the sniff test because the execution is not following the awarded terms, the awarded ceiling values for each line are being adjusted with each round of funding, when it's known the values need to be further adjusted. 

Funding is being certified at a higher amount than the contract limits first and then we are issued a modification that has the funding and changed ceiling values, unless - as you point out - it is all on the same accounting line?  But why have the ceilings for each different line/bucket on contract - which was evaluated and awarded in this fashion?  Our CO is overworked and understaffed, probably under paid too, other corners are being cut and they like to get a bit creative with their solutioning - I just want to make sure we are not getting pulled into a situation that should not be happening on how they are allocating funding and changing the values.  

[ConMan411]

Hi Retreadfed - The funding is ALL at the Task Order level, but all Task Orders are added up and it goes against the ceiling values at the contract level.  My comment is that with each funding action/modification (the contract level is modified to issue/incorporate the funding modifications to the Task Orders, the Task Orders are not modified without a contract level modification & each funding action that happens at the TO level is added as a new CLIN/SLIN/ACRN at the contract level because it is a new funding cite/accounting line), the CO is adjusting the ceiling of one bucket/line to accommodate the other bucket/line so funding does not exceed the ceiling for that particular one.  In this case, Travel and ODCs require more ceiling so the CO is taking it out of our labor ceiling but doing a conversion to the penny of the funding each modification, instead of doing one realignment to meet the known needs of the program.  I hope that provides more clarity.  I appreciate your time and response. 

[Vern Edwards]

@ConMan411

Ceilings or "caps" on individual line item quantities or dollar amounts are not unusual. However, they are usually only contractual in nature and not reflective of specific statutory or regulatory limitations. They are program or project control mechanisms. As such, the parties may modify them as they see fit. I think your concerns are likely unfounded as matters of law or regulation.

Even if the line items have different fund citations, the parties can change the CLIN ceilings as long as they have funds associated with the different fund cites.

Frequent, unplanned changes in such ceilings may be indicative of poor program or project management. But that would be an entirely different matter.

The GAO Redbook is a good source of information about budgeting and funding. However, it has little to say about program or project management.

I suggest that you exercise discretion about making complaints. It may be that you simply don't understand the rules and what is going on. Contract funding can be very complicated.

[ConMan411]

Thank you, Vern!  I have seen the Redbook referenced before; I will take the time to see if I can learn from that now that my curiosity has led me in that direction.  I also appreciate your opinion that my concerns are likely unfounded, that lets me see it's just a rope and not a snake in our path.   

[Retreadfed]

3 hours ago, ConMan411 said:

I do not have access to that office as a contractor. 

If you are a contractor, why are you concerned about how the government is handling this contract?  Federal fiscal law, e.g., the Anti-Deficiency Act, the Purpose Statute, etc.,  is aimed solely at government personnel.

[ConMan411]

Do contractors not have a duty to say something or the right to investigate on matters? As a contractor the CO actions (if inappropriate) can cause consequences that jeopardize our award, obviously not what we want.  For my concern posted, I really do not know what those consequences may have been - I am not an expert on this topic (clearly) but that would have been another question for me to find an answer to if I had to continue down that rabbit hole if it WAS a valid concern.  Part of my duties on the contractor side is risk management for my company.  

With the opinions Vern provided, it sounds like my situation is on the program side and it's still within bounds - which is GREAT news for me, I will start beating up (collaborating professionally with) the program office instead. 😉  Again, thank you for the insights and your time, I do appreciate it!

PS for Vern: It does appear it is on one line of accounting. 

[Retreadfed]

20 hours ago, ConMan411 said:

I will start beating up (collaborating professionally with) the program office instead. 

This is where you can really get in trouble.  Remember, only the contracting officer can bind the government.  There have been several contractors who got burned by listening to what "program office" personnel told or promised them.

[Vern Edwards]

On 4/20/2023 at 11:09 AM, ConMan411 said:

I am not an expert on this topic...

On 4/20/2023 at 11:09 AM, ConMan411 said:

I will start beating up (collaborating professionally with) the program office instead.

Foolhardy. There are few things more annoying than a know-nothing chastiser. But a man's (or woman's) gotta do what a man's (or woman's) gotta do.

[ConMan411]

I’ll try the NCMA forums, thanks Vern. 

 

Edited May 2, 2023 by ConMan411
Unreadable according to Vern

[Vern Edwards]

I find that huge block of text to be unreadable. It looks like text in an ancient language. It looks like the Rosetta Stone.

Have at it, gang. I'm opting out. It's beyond my ability and patience.

[formerfed]

1 hour ago, Vern Edwards said:

I find that huge block of text to be unreadable. It looks like text in an ancient language. It looks like the Rosetta Stone.

Have at it, gang. I'm opting out. It's beyond by ability and patience.

👍🏻 That’s my take as well.  Too difficult to read.  I don’t have symphony for contractors that don’t establish a collaborative arrangement with the CO/COR/PM right after award.  It’s so important for the parties to understand each others expectations and responsibilities at the beginning.  Waiting until an issue arises later with lots of finder pointing doesn’t get people anywhere