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  • Question

    If the winning bid falls under the $250K investment threshold, do we have to substitute the procurement funds with O&M funds? If we don't have sufficient O&M available at that time, will the contracting officer cancel the purchase action?


    Answer

    If you requested procurement funding to procure this item based a cost expected to exceed the $250K expense/investment threshold, you appropriately followed the policy described in DoDR 7000.14-R (Fin Mgt Reg), Volume 2A, Chapter 1 (http://comptroller.defense.gov/fmr/02a/02a_01.pdf), section 0102, Funding Policies.  Assuming procurement funds were subsequently appropriated for this purpose (in response to your request), you should cite the procurement funds even if the item ends of costing less than $250K, as procurement funds were appropriated for the item, not O&M.

    The cited policy in the FMR directs how to request funds in the correct appropriation in your budget request (in advance of the need).  If conditions later change (i.e., actual cost is below $250K threshold) you do not have to request or use O&M if procurement funds have already been appropriated for that purpose. 
     

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