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  • Question

    If I T4C this contract, can I justify using previous year funding to re-purchase the requirement from a new source?


    Answer

    1. There are several items concerning your question. One, is the contract a commercial acquired via FAR Part 12 or is it a non-commerical contract. Second, if the contractor has not performed, then the contractor should be terminated for cause (FAR Part 12) or terminated for default (FAR Part 49). A termination for convenience allows the contractor to recoup costs incurred, from the start of the contractual period up to the date of termination. These costs are negotiated and eventually paid to the contractor. FAR Part 12.403(d)(1) provides specifics concerning a termination for convenience under a commercial contract, and FAR Part 49.2 (fixed price) and FAR Part 49.3 (cost-reimbursement) provides specifics for termination of a non-commercial contract. Under a termination for convenience, there are no recoupment costs from the contractor. 

    2. However, your scenario indicates a termination for cause (FAR 12.403(c)) or default (FAR 49.4). A cure notice would be issued to the contractor and after 10 days, if no delivery is made, a termination would occur. The government can recoup reprocurement costs from the defaulted contractor. An appropriate past performance evaluation would also need to occur.

    3. Third, the color of money determines whether existing funds from the contract can be used for the reprocurement of the item(s). If FY 12 annual appropriation was utilized in the procurement of the horns, this appropiation has expired. Therefore, you would not be able to utilized FY 12 annual appropriation for the reprocurement of the horns. FY 14 annual appropriation would need to be used.  If FY 12 research and development funds were used in the original contract, those funds also would expire at the end of FY 13. (Research and development funds are two year appropariations. For FY 12 research and development, the two years would be FY 12 and FY 13) If FY 12 procurement funds were utilized in the original contract, then those funds can be utilized for the reprocurement in FY 14.

    4. Please make sure that you have coordinated with legal in terms of the termination action against the contractor, as well as finance (budgeting) for the color of funds. 

     

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