Contract signed in one fiscal year but won't begin in another

[Minnen]

My question is, if you sign a contract on September 30th, but the work doesn't begin until December of 2024 or January of 2025, is that violating the bonafide needs rule? I know we always approve contracts at the deadline in order to use those annual funds, but is there anything that states a specific timeline as to when the work must begin? Even when we sign contracts on September 30th, sometimes the work doesn't begin until late October. 

[Vern Edwards]

The best way for you to get an answer to your question, which is complicated, is to go to the GAO publication, Principles of Federal Appropriations Law (known popularly as the "Red Book") and read Chapter 5, Availability of Appropriations: Time, Section B, The Bona Fide Needs Rule. You must read carefully and thoughtfully.

The Red Book is available for free on line. It's worth your time.

[formerfed]

Don’t even have to do an online search.  It’s available on Wifcon  Red Book here

[Retreadfed]

In addition to what Vern said about reading thoughtfully and carefully, I suggest you read the decisions that are cited in the discussion.  Unfortunately, I have sometimes found that the actual decisions do not support the statement for which they are cited.

[Minnen]

Thanks @Retreadfed and @Vern Edwards

[dsmith101abn]

I agree this is a tough question, there are so many what ifs.

The redbook is a great resource but it’s a hard read.

I don’t know what you’re doing but maybe ask your programming/finance/fiscal office and go from there. You aren’t going to read the redbook and come to a conclusion overnight and convince the world of your opinion.   

i'm making the assumption it's end of fiscal year and you're trying to think something thru. 

[RJ_Walther]

On 9/9/2024 at 11:24 PM, dsmith101abn said:

The redbook is a great resource but it’s a hard read.

For this reason I often recommend using the Army's contract attorney and fiscal law deskbooks here: https://tjaglcs.army.mil/publications as a read-along companion to the Redbook (e.g., find your topic in the deskbooks and then read what it references in the Redbook).

Just know that if you aren't in the DOD you should be looking for alternate references for anything it says is from the DFARS or Title 10.

[Sam101]

See this:

https://comptroller.defense.gov/portals/45/documents/fmr/current/03/03_08.pdf

Page 8-12

3.5 Recording Maintenance and Repair Projects Obligations... seems to be talking about Maintenance and Repair Projects only.

Quote

Current fiscal year appropriations may be obligated for those maintenance and repair contracts awarded near the end of the fiscal year, even though contractor performance may not begin until the following fiscal year. The contract must satisfy a bona fide need that exists in the fiscal year of the appropriation to be charged. In addition, contracts awarded near the end of the fiscal year must contain a specific requirement that work begins before January 1 of the following calendar year.

Note that this only applies to DoD, and if they meant for this January 1st thing to be applicable to not only Maintenance and Repair Projects, 3.5 would be titled Recording Obligations for Services, but no, they titled it Recording Maintenance and Repair Projects Obligations.