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    I have worked in the ACQ field as a COR for 15 years and have always reviewed contracts with current year funding that was not going to be utilized on the requirement in order to de-obligate. Why is this okay for other agencies (Army, Air Force, DIA) but not for this one? I am not aware of a FAR regulation that states this should not be done. Could you please answer the question of proper procedure regarding de-obligating unused current year funding that would other wise go unused if not de-obligated for use on other requirements? Thank you


    Answer

    Without knowing some of the specifics of your contract, once funds are obligated on a contract, they cannot be removed without the contractor's consent (bilateral modification).  There is not a specific FAR clause which addresses the deobligation of funds. We recommend that you consult and follow agency procedures in accordance with policy established by your comptroller. As the customer, you will forward this request in writing to the Contracting Officer for action.  There are many scenarios associated with deobligation of funds and I recommend you review several examples in the AAP section under "Deobligation of funds" to gain a solid understanding of this topic. 

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