May I exercise the option period with no new funding at this point in time?
The following response is based solely on the question and background information provided. As we do not have all the facts particular to your contract, program, and situation, we highly recommend, as applicable, you consult your leadership, contracting officer and/or Legal Office for guidance.
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Judging from the content of your question it appears you are using operations and maintenance (O&M) funds to continue performance under a services contract. If so, this is one year funding that is obligated in the year in which the contracted services are required and may or may not carryover to the next fiscal year. Your question raises a number of financial management considerations. First, it is assumed that you have established a continuing "bona fide" need for the contracted O&M services into fiscal year (FY) 14 from FY13. Typically, O&M funds are precluded from being used or obligated beyond the year for which they were appropriated (i.e., FY13 O&M must be obligated between 1 Oct 12 and 30 Sep 13). However, an exception to crossing FY lines is provided for severable (i.e., continuing and recurring in nature, and value is received at the time the service is rendered) services to begin in one fiscal year and end in the next, as long as the contract does not exceed one year.
With the above assumptions and information as background, you ask whether you may exercise the operation with "no new funding" at this point. If the funding for the FY13 is coming to a close and you are now approaching an FY 14 option, you will require FY14 O&M funding to continue services. On 17 October 2013, the Office of Management and Budget issued, in the absence of an FY14 Appropriations Act, OMB Bulleting No 14-01 outlining the conditions of the FY 14 "continuing resolution" granted by Congress. Continuing resolutions (also known as "CRs"), as defined by OMB, are "joint resolutions that provide continuing appropriations for a fiscal year. CRs are enacted when Congress has not yet passed new appropriations bills and a program's appropriations are about to or have expired, or when the President has vetoed congressionally passed appropriations bills. Because of the nature of CRs, you should operate at a minimal level until after your regular appropriation is enacted." Therefore, if by "no new funding" you mean FY14 funds not otherwise covered by the FY CR authority referenced above, then you may not be in a position to continue the contract via the option period. However, it is critical that you consult with your financial management and legal support personnel to determine whether the services covered under the option fit the conditions under which CR funding is provided. It is typical in the case of services, that a continuation of services is allowable under a continuing resolution; however, FY14 has the added dimension of the "Presidential sequestration order" which may impact the amount ofFY14 obligation authority allowable under your contract.