Can a new contract be awarded for 12 months using FY17 funding even though the extension for 4 months was already funded with FY17 funding. The contract is severable.
The question you asked revolves around the use of FY 2017 Operations and Maintenance Appropriation (O&M) funds on a severable contract. You have already used FY 2017 funds to extend the previous (FY 2016 funds) contract. The FY 2016 contract received 4 months of funding with FY 2017 funding using the Operations and Maintenance Appropriation (O&M). O&M is guided by the Annual Funding Policy which states that we will request obligation authority necessary to cover all expenses during the 12 month budget period (fiscal year). However, there is a statutory provision (PL 105-85, Sec. 801 & Title 10, U.S. Code 2410a) which allows funding (all in the first year) a severable service contract/task beginning in one FY and ending in the next FY, all in the first year, if the contract period (without regard to any option to extend the period of the contract) does not exceed 12 months and the Comptroller approves the crossing of fiscal years. Based on the information provided, the contract referenced will exceed 12 months, which may be an option to extend the period of the contract. The funds must be obligated prior to 30 Sept 2017 since the period of availability for obligation on an O&M appropriation begins on 1 Oct and ends on 30 Sept.
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I strongly suggest you consult with your local Comptroller/BFM/contracting officer/Legal Office for additional guidance/interpretation of the above.