Maquoketa Posted July 23, 2024 Report Share Posted July 23, 2024 The agency I work for is Not Funded with 1-year appropriations like most federal agencies. Most of our funds are no year or 4/5 year funds. There has been great debate about if FAR Part 17 applies because it appears the intent of Part 17 was written for agencies with 1-year appropriations, and this is not the situation with my agency. I want to do FFP contract with a 3-year period of performance and fund it completely at time of award. The cancellation requirements and determinations appear not applicable to this contract due to our funding. Is this a multiyear contract as defined in Part 17 or something else? Quote Link to comment Share on other sites More sharing options...
C Culham Posted July 23, 2024 Report Share Posted July 23, 2024 1 hour ago, Maquoketa said: Is this a multiyear contract as defined in Part 17 or something else? Maybe not a sriaght forward question as one might think! Quote Link to comment Share on other sites More sharing options...
ji20874 Posted July 23, 2024 Report Share Posted July 23, 2024 I recommend a conversation with your agency’s procurement executive of HCA (head of the contracting activity). Persuade him or her or your approach directly if possible. The statute behind FAR 17.1 uses the following text: “…funds are available and obligated for the contract, for the full period of the contract or for the first fiscal year in which the contract is in effect, and for the estimated costs associated with a necessary termination of the contract…” Quote Link to comment Share on other sites More sharing options...
Don Mansfield Posted July 23, 2024 Report Share Posted July 23, 2024 3 hours ago, Maquoketa said: I want to do FFP contract with a 3-year period of performance and fund it completely at time of award. Are you buying three years worth of requirements? Or is it a project that is going to take three years? Quote Link to comment Share on other sites More sharing options...
Maquoketa Posted July 23, 2024 Author Report Share Posted July 23, 2024 Project will take three years to perform. Quote Link to comment Share on other sites More sharing options...
Don Mansfield Posted July 23, 2024 Report Share Posted July 23, 2024 If you're not buying more than one year's requirement, it doesn't meet the definition of multiyear contract at FAR 17.103. Quote Link to comment Share on other sites More sharing options...
ji20874 Posted July 23, 2024 Report Share Posted July 23, 2024 Don, Thanks for asking your question. I gave too much benefit to the original poster. Based on OP’s answer to your question, he or she has no business in FAR 17.1. Quote Link to comment Share on other sites More sharing options...
Don Mansfield Posted July 23, 2024 Report Share Posted July 23, 2024 1 hour ago, ji20874 said: Don, Thanks for asking your question. I gave too much benefit to the original poster. Based on OP’s answer to your question, he or she has no business in FAR 17.1. 👍 Quote Link to comment Share on other sites More sharing options...
Maquoketa Posted July 23, 2024 Author Report Share Posted July 23, 2024 1 hour ago, ji20874 said: Don, Thanks for asking your question. I gave too much benefit to the original poster. Based on OP’s answer to your question, he or she has no business in FAR 17.1. Don, what did I miss? Please explain. Quote Link to comment Share on other sites More sharing options...
joel hoffman Posted July 23, 2024 Report Share Posted July 23, 2024 4 hours ago, Don Mansfield said: If you're not buying more than one year's requirement, it doesn't meet the definition of multiyear contract at FAR 17.103. 4 hours ago, Maquoketa said: Project will take three years to perform. Can you expand upon the nature of the “requirement”? Quote Link to comment Share on other sites More sharing options...
Maquoketa Posted July 23, 2024 Author Report Share Posted July 23, 2024 4 minutes ago, joel hoffman said: Can you expand upon the nature of the “requirement”? It is an environment service contract for a firm to go out and monitor and survey an endangered species for two years. The funding being used is four-year appropriations. We want to set a period of performance for two years (no options) and fund the whole project at award. I am being told that it is a multi-year contract and must be approved by the HCA. Quote Link to comment Share on other sites More sharing options...
Jamaal Valentine Posted July 24, 2024 Report Share Posted July 24, 2024 9 hours ago, Maquoketa said: Don, what did I miss? Please explain. Based on what you’ve posted, your plan doesn’t involve a multi-year contract. Do you agree (based on the definition of multi-year contract at FAR 17.103)? Quote Link to comment Share on other sites More sharing options...
uva383 Posted July 24, 2024 Report Share Posted July 24, 2024 10 hours ago, Maquoketa said: It is an environment service contract for a firm to go out and monitor and survey an endangered species for two years. The funding being used is four-year appropriations. We want to set a period of performance for two years (no options) and fund the whole project at award. I am being told that it is a multi-year contract and must be approved by the HCA. Based on the facts that you've presented unless we're all missing something sounds like your HCA needs some training on multiple year and multi-year procurements. This doesn't sound like either. Multiyear contracting enables agencies, such as DOD, to contract for more than 1 and up to 5 years of quantities while continuing to use funding appropriated annually to fulfill the contract. Unlike other contracts that span multiple years, multiyear contracts do not have to include options to be exercised each year after the first. This type of procurement can lead to cost savings derived from a number of sources, including: • purchasing parts and materials in economic order quantities; • improved production processes and efficiencies; and • better use of production facilities. A multi-year contract means a contract for the purchase of supplies or services for more than 1, but not more than 5, program years. Such contracts are issued under specific congressional authority for specific programs. A multi-year contract may provide that performance under the contract during the second and subsequent years of the contract is contingent upon the appropriation of funds, and (if it does so provide) may provide for a cancellation payment to be made to the contractor if appropriations are not made. The key distinguishing difference between multi-year contracts and multiple year contracts is that multi-year contracts buy more than 1 year's requirement (of a product or service) without establishing and having to exercise an option for each program year after the first. What you are describing doesn't seem like it fits either bill It doesn't sound like you are awarding a contract to a firm to go and study multiple populations of an endangered species and write multiple reports of its findings to be delivered over a defined period of years nor does it sound like you are awarding a contract that is a base and options for reports on an endangered species. This sounds like a single non-severable study of an endangered species that will take more than one year to complete. Quote Link to comment Share on other sites More sharing options...
joel hoffman Posted July 24, 2024 Report Share Posted July 24, 2024 14 hours ago, Maquoketa said: It is an environment service contract for a firm to go out and monitor and survey an endangered species for two years. The funding being used is four-year appropriations. We want to set a period of performance for two years (no options) and fund the whole project at award. I am being told that it is a multi-year contract and must be approved by the HCA. It seems that you are being told essentially that a contract for non-severable services that is fully funded up-front and that takes more than one year (12 month period) to accomplish requires the approval of your Head of the Contracting Agency. That seems to me to be ridiculous. I know that the literal reading of the FAR might lead someone to that conclusion. But as Carl stated, FAR 17.103 Definitions begins with the definition of cancelation and describes the meaning of a multi-year contract as: “Multi-year contract means a contract for the purchase of supplies or services for more than 1, but not more than 5, program years.” Stop reading right there. Does your requirement span more than one “program year”? Here is a definition of “program year” from DAU: “DEFINITION The fiscal year (FY) in which authorization was provided and in which funds were appropriated for a particular program, regardless of the FY in which funds for that program might be obligated. SOURCE DoD 7000.14-R (Volume 2A Chapter 1)” The same source differentiates between “fully funding of procurement programs” (beginning on page 1-26) and “multi-year procurements” (beginning on page I-29). For practical purposes, if there is a bonafide need for a two year study and the appropriate funds - not from separate program years- are available to fully fund the study, why would the HCA have to approve such a contract? Quote Link to comment Share on other sites More sharing options...
C Culham Posted July 24, 2024 Report Share Posted July 24, 2024 @Maquoketa To help support the information that @joel hoffman has provided I suggest that you, as well as who is "telling" you, take a long hard read of the Bona Fide Needs rule that can be found here - https://www.wifcon.com/bonafidecontents.htm The discussion of the website will then lead to references in the GAO "Red Book" and discussion of Multiyear Contracts and no year appropriations. Quote Link to comment Share on other sites More sharing options...
joel hoffman Posted July 24, 2024 Report Share Posted July 24, 2024 Just now, C Culham said: @Maquoketa To help support the information that @joel hoffman has provided I suggest that you, as well as who is "telling" you, take a long hard read of the Bona Fide Needs rule that can be found here - https://www.wifcon.com/bonafidecontents.htm The discussion of the website will then lead to references in the GAO "Red Book" and discussion of Multiyear Contracts and no year appropriations. Thanks, Carl. Quote Link to comment Share on other sites More sharing options...
Maquoketa Posted July 25, 2024 Author Report Share Posted July 25, 2024 Thank you everyone for your feedback! Quote Link to comment Share on other sites More sharing options...
Jamaal Valentine Posted July 25, 2024 Report Share Posted July 25, 2024 @Vern Edwards On 7/23/2024 at 4:24 PM, Maquoketa said: It is an environment service contract for a firm to go out and monitor and survey an endangered species for two years. The funding being used is four-year appropriations. We want to set a period of performance for two years (no options) and fund the whole project at award. I am being told that it is a multi-year contract and must be approved by the HCA. I wonder if this person works remotely or is getting their information in a traditional office. We know they are searching for e-learning. Quote Link to comment Share on other sites More sharing options...
Vern Edwards Posted July 25, 2024 Report Share Posted July 25, 2024 7 hours ago, Jamaal Valentine said: @Vern Edwards I wonder if this person works remotely or is getting their information in a traditional office. We know they are searching for e-learning. @Jamaal Valentine I don't know. What I do know is that the OP does not know how to do research or is too lazy to do it. There are numerous published explanations of multi-year contracting and multi-year contracts. There's FAR Subpart 17.1, the GAO Red Book, a page here at Wifcon (https://www.wifcon.com/bona/bonafide8.htm), and many articles at Google Scholar, 312 according to the site. Instead of doing research, the OP came here and asked a quick question without providing enough context, a question that no one should have answered except to refer the OP to some readings and wish them luck. I don't know why the people who responded bothered to waste their time. Multi-year contracting is not rocket science. FAR Subpart 17.1 is quite clear about what is a multi-year contract. In the age of the internet there is no excuse for coming to this website to seek an answer to such a question. With all the calls for innovation, this website should be used to discuss ideas. It appears that ideas are lacking or too difficult. If I had been the OP and had been faced with such an office controversy I would have set out to become my office's expert in the concept and then offered to provide a briefing to the clueless. That's how you grow up to become a chief of a contracting office, a policy-maker, an HCA, or higher. Quote Link to comment Share on other sites More sharing options...
Jamaal Valentine Posted July 26, 2024 Report Share Posted July 26, 2024 @Maquoketa, I’m glad you found Wifcon and hope you learned something useful. I hard a lot of things in my office when I started out. I was skeptical about much of it because few could show me evidence. Wifcon is a great place for references and reasoning. I’m sure you hear a lot of things in your office too … get comfortable verifying asserted facts. Quote Link to comment Share on other sites More sharing options...
C Culham Posted July 26, 2024 Report Share Posted July 26, 2024 8 hours ago, Jamaal Valentine said: I’m sure you hear a lot of things in your office too … get comfortable verifying asserted facts. The greatest habit! It not only applies to acquisition but to every day life, especially in these current times. Quote Link to comment Share on other sites More sharing options...
joel hoffman Posted July 26, 2024 Report Share Posted July 26, 2024 4 hours ago, C Culham said: The greatest habit! It not only applies to acquisition but to every day life, especially in these current times. I have a different viewpoint. I asked the OP if his/her organization is conflating multiple year length of the contract effort with more than one program funding year with respect to “multi-year contracting”. He/she confirmed it and said that it involves more contracts than the subject of this thread. Even though the OP’s organization uses no-year and four year funding, if the period of performance (for a current need) exceeds a year, they are calling it multi-year contracting… And the FAR and many other references are poorly written in the detailed discussion of multi year contracting by not differentiating between “more than one year” and “more than one program year”. The simply worded phrase “more than one year” is ambiguous. As written, it can refer to a contract period with a “length” of more than one year. Or it could refer to requiring separate, appropriated funding for follow-on year(s). One has to hunt to learn the context of the phrase“ more than one year”. Quote Link to comment Share on other sites More sharing options...
Vern Edwards Posted July 26, 2024 Report Share Posted July 26, 2024 The GAO explains "multi-year contract" in a single paragraph of the Red Book: Quote The term “multiyear contract” has been used in a variety of situations to describe a variety of contracts touching more than one fiscal year. To prevent confusion, we think it is important to start by establishing a working definition. A multiyear contract, as we use the term in this discussion, is a contract covering the requirements, or needs, of more than one fiscal year. A contract for the needs of the current year, even though performance may extend over several years, is not a multiyear contract. We discuss contracts such as these, where performance may extend beyond the end of the fiscal year, in sections B.4 and B.5 of this chapter. Thus, a contract to construct a ship that will take 3 years to complete is not a multiyear contract; a contract to construct one ship a year for the next 3 years is. Emphasis added. As for the phrase, "needs of the current year", a single undertaking is the need of the year in which the need arises, even if it will take several years to complete. Recurring needs for many kinds of supplies and severable services are determined on an annual basis. For example, artillery shells and cartridges. But the need for other things, like studies, arrises on an ad hoc basis. Multi-year contracts are sometimes used for the first kind of need in order to enjoy savings from economies of scale. There is generally no benefit from using multi-year contracting for the second kind of need, because there are no economies of scale to be had. Quote Link to comment Share on other sites More sharing options...
formerfed Posted July 27, 2024 Report Share Posted July 27, 2024 7 hours ago, Vern Edwards said: The GAO explains "multi-year contract" in a single paragraph of the Red Book: Emphasis added. As for the phrase, "needs of the current year", a single undertaking is the need of the year in which the need arises, even if it will take several years to complete. Recurring needs for many kinds of supplies and severable services are determined on an annual basis. For example, artillery shells and cartridges. But the need for other things, like studies, arrises on an ad hoc basis. Multi-year contracts are sometimes used for the first kind of need in order to enjoy savings from economies of scale. There is generally no benefit from using multi-year contracting for the second kind of need, because there are no economies of scale to be had. Great explanation. Something people here need to study and remember. Quote Link to comment Share on other sites More sharing options...
Vern Edwards Posted July 27, 2024 Report Share Posted July 27, 2024 It's important to remember that our government works based on annual budgets, authorizations, and appropriations. Most government needs are for ongoing operations. The president must submit a budget request for each upcoming year and Congress authorizes operations and provides money for one year at a time for various consumable supplies and "severable" services (services able to be broken down into recurring time periods of consumption in which each time period is complete, like grounds maintenance and guard services). Each year's funds must be obligated and expended only for the needs of the year for which funds were authorized and appropriated (the bona fide needs rule). When a need arises in one fiscal year for a project or program that cannot be completed in that year, Congress may provide multiple year appropriations or may incrementally fund the program. See. e.g., Congressional Research Service, Defense Primer: Procurement (2024 update), which discusses "full funding" versus "incremental funding". https://crsreports.congress.gov/product/pdf/IF/IF10599#:~:text=Under incremental funding%2C a system's,a funding mechanism for procurement. That scheme is designed to enable Congress to maintain control over government spending, but it is not always efficient. So when economies of scale can permit the government to get better prices if Congress allowed the government to make commitments to buy more than one year's quantities, Congress may authorize multi-year contracting. A multi-year contract allows the government to commit (but not obligate--the distinction is important) for more than one year in order to get better prices, but allows it to back out if the future years' needs go away, with compensation to the contractor up to a cancellation ceiling. When a need arises in one year for the conduct of a project (e.g., construction of a facility) but fulfillment cannot be completed in that year, Congress may authorize appropriations for the year in which the need arises that may be obligated funds across more than one fiscal year and expended over the course entire project. Those kinds of contracts are performed over the course of multiple years, but they are not multi-year contracts. See Red Book, Vol. III, Chapter 12, page 12-3, footnote 3: Quote We use the term “multiyear” here to mean contracts which cross fiscal years. This is not to be confused with the much more specific and prescribed concept of multiyear contracting and ordering procedures as provided in the FAR, 48 C.F.R. subpart 17.1. See especially the definition of a multiyear contract in 48 C.F.R. § 17.103. All of this and much more is explained in the GAO Red Book, Volume I and III, which the OP's colleagues apparently have not heard of. There is more to contracting than is dreamt of in their philosophy. You cannot understand government contracting and funding without knowledge of the authorization and appropriations process. Most contracting people are dunces when it comes to funding. I consider myself to be a dunce compared to others I know. Research, read, study. Make yourself an "expert" and the go-to person in your office for answers to important questions. It pays off in the long run. Quote Link to comment Share on other sites More sharing options...
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