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    What authority do you use to deobligate funds from a contract that still has money on it and has not reached completion date. The overall estimate for the contract was wrong.


    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.
    To address your question, I am assuming, based on the limited background provided, that you are referring to an "unpriced purchase order" as referenced under FAR 13.302-2.  So, in this instance you have obligated funds subject to determining the final price and have now, based on that determination, a need to deobligate the funding amount above the actual price agreed upon.  I also assume the action is definitizing said final price agreement which would necessitate a bilateral agreement in accordance with FAR 43.103(a)(3).  As such, your bilateral modification deobligating funds should reference the original purchase order that established the unpriced purchase subject to definitization.  Alternatively, a bilateral modification citing "mutual agreement of the parties" (reference FAR 43.103(a)(3)) might be appropriate if my assumptions above are inaccurate. 

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