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    1. How do you define your requirement in order to be able to reconcile it with the Bona fide need rule? 2. How do you avoid losing the FY funding when you have an under run that is identified after the FY ends? (Especially when you have more you work you could add) 3. We have a CPFF Requirements contract type. What would be a better contract type choice?


    Answer

    1.You don't "define your requirement in order to be able to reconcile it with the Bona fide need rule". First exam your requirement and when you expect to put that requirement on contract to determine if you are compliant with the bona fide need rule.  Whatever you are procuring (commodities, services, construction, etc.) must be a bona fide need of the FY you are obligating the funds. 

    Requirements are only tangentially related to the Bona Fide Needs rule. The Bona FIdes Needs rule determines how you fund the contract, and that all depends on whether the work is severable or non-severable. Non-severable contract requirements have to be fully funded at time of award; severable requirements can be incrementally funded. The easiest way to establish a severable contract (which is almost always for services, not equipment), is to create discrete "chunks" or "phases" of work. If you are asking me how to do an equipment contract with severable work phases, you can look at setting up a "pre-production phase", a "first article test phase", an "initial production run" phase, a "full production phase", and then a "post production phase". Each phase requires something of value be delivered to the Government- a report, a test lot, a fully acceptable first article, etc and you can pay for those phases incrementally. You can do something like that for data products- perhaps setting up unique data deliverables by quarter?
     
    2.  Funds unexpended after five years from the last FY they were available for "new" obligations become expired.  By appropriations law, expired funds are no longer available for disbursement (e.g. pay a contractor) or obligation adjustment request (e.g. settle a claim from a previous FY).

    3.  Bona fide need does not change due to contract type, that determination is based solely on the requirement.



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