Can I Extend Pop to Dec 16 on expired funds?
Based on your question and question background, the following assumptions have been made:
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(1) The original requirement is non-severable to perform/provide an equipment upgrade end item.
(2) The original requirement was awarded via contract in either FY12, FY13 or FY14 by obligating active FY12 3080 (Air Force Procurement) funds.
(3) The extension to the period of performance is going to cost the government because you are asking if you can extend the period of performance from April 2016 to December 2016 and use FY12 expired funds. You are not contemplating a “no-cost extension”.
(4) Your original requirement is either a cost reimbursement effort or the extension to the period of performance is government caused because you are asking if you can extend the period of performance from April 2016 to December 2016 and you need to use funding to do so.
Since we do not have all of the facts pertaining to your requirement, solicitation/contract or contractor(s), the following answer is based solely on the background and question provided. As we do not have access to the contract folder or particulars that apply to this situation, we highly recommend you consult the Contracting Officer, your Finance Office and possibly the Legal Office.
According to DoD 7000.14-R, Volume 3, Chapter 8, p 8-13, non-severable services contracts (such as services to produce a single or unified outcome, product, or report) are “entire” and must be funded entirely with appropriations available for new obligations at the time the contract is awarded, and the period of performance may extend across fiscal years
As explained in GAO Decision B-219829, July 22, 1986, if your contract modification to extend the period of performance is out of scope, than you cannot use the FY12 expired funding. You would need to the active appropriation during the time of executing the modification. Also, to make an out-of-scope change to the original contract, an exception to full and open competition under FAR 6.3 must be justified and the modification would be bilateral. Increases in scope, quantity increases, or extending the period of performance (not within scope) are generally not allowed.
Likewise, as explained in that same GAO Decision B-219829, July 22, 1986, if the contract modification is not based on the government’s liability arising and enforceable via a clause or stipulation in the original contract (antecedent liability), then you also cannot use the FY12 expired funding. You would need to use the active appropriation during the time of executing the modification. Please note, to make an out-of-scope change to the original contract, an exception to full and open competition under FAR 6.3 must be justified.
Within-scope changes generally are funded from the appropriation that originally financed the contract until cancellation. For contracts spanning lengthy periods of time, funding of within scope modifications involves the use of expired appropriations. In general, an extension in period of performance for the contractor to complete the specified work is not a new acquisition or not out-of-scope and does not require new competition.
Per 31 U.S.C. § 1553(a), an expired appropriation is an appropriation whose period of availability has ended and is no longer available for new obligations. It retains its fiscal identity and is available to adjust and liquidate previously incurred obligations for five years. In addition, you cannot use the expired appropriation for new obligations; however you can use the appropriation via its fiscal identity (3080) if available to adjust and liquidate previously incurred obligation for five years. Additionally, some adjustments are possible after the end of the period of availability, but before an account closes. Further, appropriations remain available for recording, adjusting, and liquidating prior obligations properly chargeable to the account. Finally, per DoD FMR, Vol 3, Chapter 13, para. 130208.B, appropriations retain their complete accounting classification identifiers throughout the entire five-year expired period.
If your contract modification for an extended period of performance is within scope and is based on the government’s liability arising and enforceable via a clause or stipulation in the original contract (antecedent liability), then you can use the FY12 expired funding, which was current at the time the contract was originally executed.
As explained in 61Comp. Gen. 609 (1982), there is an important exception or qualification to the antecedent liability rule if your contract is a cost reimbursement contract. In cost reimbursement contracts, discretionary cost increases (i.e., increases that are not enforceable by the contractor), which exceed funding ceilings established by the contract, may be charged to funds currently available when the discretionary increase is granted by the contracting officer. Further, changes that do not exceed the stipulated ceiling continue to be chargeable to funds available when the contract was originally made as do amounts for final overhead in excess of the ceiling where the contractor has an enforceable right to those amounts
If the period of performance extension is due exclusively to a delay in completing the work that is already on contract and not due to a change in the scope of work that is being done, then it would be reasonable to assume that the work still falls within the bona fide need rule for the funds that are on contract. Therefore, using the expired funds would be appropriate.
Concerning whether your need to extend the period of performance is within or out of scope, as well as Bona Fide Needs Rule implications, you should consider the amount of the increase in the period of performance. You mention in your question background that the period of performance expires in April 2016, the contractor is running behind schedule and is expected to turn over the equipment in Dec 16. This is an 8-month extension, which may seem like a lengthy extension. This will depend on the extension’s relationship to the original total period of performance. Again, we do not have access to the contract folder or particulars that apply to this situation; therefore, we do not know when the original requirement was awarded nor the original total period of performance. From a contract management standpoint, you should also consider the basis or cause of why the period of performance needs to be extended from April 2016 to December 2016. Usually, the government should receive consideration from the contractor for not meeting the schedule delivery date in accordance with the contract. Again, we do not have all the particulars to your contract.
For your delivery schedule extension modification, you would mostly like use one of the following clauses: For a cost reimbursement type contract, FAR 52.249-14, Excusable Delays. For a fixed-price type contract, FAR 52.242-17 Government Delay of Work, or FAR 52.249-8, Default Clause. For the acquisition of commercial items, FAR 52.212-4 -- Contract Terms and Conditions -- Commercial Items.
31 U.S.C. § 1553(a)
DoD 7000.14-R, Financial Management Regulation Principles of Federal Appropriations Law