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    Are there exceptions to the Bona Fide Needs rule which allow us to use prior year funding in September for a US Govt sponsored workshop in support of a Customs Law enforcement event in mid October because there is insufficient time to award the event organizing contract in October? If there is an exception, what is considered adequate lead time?


    Answer

     The question revolves around the use of expired funds for a training event in the next fiscal year. 
     
    1. The document referenced below and quoted in pertinent part is applicable to this response.
     
    2012 FISCAL LAW DESKBOOK
    Contract and Fiscal Law Department, The Judge Advocate General’s Legal Center and School, United States Army, Charlottesville, Virginia http://www.acq.osd.mil/dpap/ccap/cc/jcchb/Files/Topical/Funding_Docs/guides/2012_Fiscal_Law_Deskbook.pdf
     
    CHAPTER 1 – INTRODUCTION TO FISCAL LAW
    III. LIMITATIONS ON THE USE OF APPROPRIATED FUNDS C. Limitations -- Time.
    1. Appropriations are available for limited periods. An agency must incur a legal obligation to pay money within an appropriation’s period of availability. If an agency fails to obligate funds before they expire, they are no longer available for new obligations.
      a. Expired funds retain their “fiscal year identity” for five years after the end of the period of availability. During this time, the funds are available to adjust existing obligations or to liquidate prior valid obligations, but are not available for new obligations. [31 U.S.C. § 1553(a). See also DOD FMR, Vol. 3, Ch. 10, para. 100201.A.]
     
    CHAPTER 3 – AVAILABILITY OF APPROPRIATIONS AS TO TIME III. THE BONA FIDE NEEDS RULE B. The Bona Fide Needs Rule. Essentially, the bona fide needs rule is a timing rule that requires both the timing of the obligation and the bona fide need to be within the fund’s period of availability. DoD FMR, Vol. 3, Ch. 8, para. 080303.A; DFAS-IN Reg. 37-1, para. 070501.
     
    E. Services
    1. General Rule: The Bona Fide Need for services does not arise until the services are rendered. Theodor Arndt GmbH & Co., B-237180, Jan. 17, 1990, 90-1 CPD ¶ 64; EPA Level of Effort Contracts, B-214597, 65 Comp. Gen. 154 (1985). Thus, in general, services must be funded with funds current as of the date the service is performed.
     
    3. Non-severable Services:
      b. The Government must fund non-severable services contracts with dollars available for obligation at the time the contract is executed. Contract performance may cross fiscal years. DFAS-IN 37-1, tbl. 8-1; Incremental Funding of U.S. Fish and Wildlife Service Research Work Orders, B-240264, 73 Comp. Gen. 77 (1994) (fish and wildlife research projects) … .
     
    IV. MULTIPLE YEAR APPROPRIATIONS
    A. Introduction
    2. Multiple year appropriations are those appropriations that expressly provide that they remain available for obligation for a definite period in excess of one fiscal year. Office of Management and Budget Circular A-11, Instructions on Budget Execution, § 20.4 (June 2006). See also DOD FMR, Vol. 3, Ch. 13, para. 130202.A.1.b.
     
    3. The multiple year appropriations usually provided to DOD include:
      (2) Research, Development, Test, and Evaluation (RDT&E).
      Period of Availability: 2 years
     
    5. The Bona Fide Needs Rule and most of its exceptions apply to multiple year appropriations.
      a. A multiple year appropriation may only be expended for obligations properly incurred during the period of availability. Therefore, the FY 2012 RDT&E Army Appropriation (Pub. L. 112-74), which is available for obligation until 30 September 2013, may be obligated for the needs of FY 2012 and FY 2013; it is not available for the needs of FY 2014.
     
    END OF REFERENCE
     
    Based on the rule the bona fide needs for the training does not arise until the services are rendered which means that the training should be paid for with FY 2017 funds.
     
    I strongly recommend that you contact your Comptroller/Legal Office for additional guidance on the situation.
     

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