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    Is there any guidance (FMR) or known federal ruling that once an amendment has been rejected - to have the customer resubmit a correct amendment; in this case another #1 amendment and then once we accept the #1 amendment - -#2 can be submitted? In addition would this apply to all types of documents? i.e., 2275, 2276, 7600, etc., with amendments.... Thank you


    Answer

    The most useful guidance concerning project orders is contained in the DoD Financial Management Regulation (FMR) 7000.14-R, Volume 11A, Chapters 1 and 2.  Chapter 1 is “General Reimbursement Procedures and Supporting Documentation.”  Chapter 2 “… prescribes the financial management guidance and policy involving project orders issued pursuant to the authority in Title 41, United States Code (U.S.C.), section 6307.”  Additional guidance on inter, and intra, agency agreements can be found in the Treasury Financial Manual (TFM), Chapter 4700, Section 4706 and Appendix 10, Section 9, DoD Instruction 4000.19, and at the Office of Federal Procurement Policy (OFPP) website.

     

    However, none of these sources of guidance on project orders address your specific concern with regards to accepting Amendment 2 prior to the acceptance of a revised Amendment 1.

     

    Therefore, let us engage in some critical thinking to see if a possible solution can be derived.  FMR, Volume 11A, Chapter 2, Paragraph 020102 states (with regard to a “project order”), “When placed with, and accepted by, a separately managed DoD-owned establishment or the USCG, the project order serves to obligate an appropriation(s) in the same manner as an order or contract with a commercial enterprise.”  Thus, it appears that at a minimum there exists a theoretical bound between project orders and contracts.

     

    The question then becomes, would a contract modification have to be delayed simply because one that has been submitted earlier in time has not yet been accepted?  The answer is a resounding, no, UNLESS THE SECOND MODIFICATION IS CONTINGENT UPON THE FIRST.  Clearly, if a contract modification is contingent upon a modification that has not yet been accepted, then the second modification would have to necessarily wait to be accepted until after the contingent modification has been accepted.  However, if a later modification is NOT contingent upon a modification that has not yet been accepted, there is nothing that would preclude acceptance of the second modification prior to the acceptance of the first.  By extension, the same reasoning should hold true for amendments to a Basic project order.

     

    The only thing that still needs to be considered is the numbering of the project order Amendments.  DFARS PGI 204.7103-2(a) says (with regard to numbering procedures), “Within a given contract, the item numbers shall be sequential but need not be consecutive.”  Therefore, in this specific scenario, if Amendment 2 were accepted prior to the revised Amendment 1, it could be accepted as #2, however the revised Amendment 1 should properly be accepted as Amendment 3.  This is frequently done within a contract, but a memo for the project order file must be written that explains that the original Amendment 1 was rejected and the revised amendment has been accepted as Amendment 3.  In such a case, it would be extremely helpful if the customer submitted the revised amendment as Amendment 3. Thus, both parties’ records would coincide.  

     

    Note: FMR, Volume 11A, Chapter 2, Paragraph 020202 is quite emphatic when it states, “Terms such as “contractual relationship,” and “commercial contracts,” are used to indicate the close relationship between project orders and commercial contracts in the particular circumstances involved. The use of these and similar terms neither must be construed as requiring project orders to be subject to the provisions of the Federal Acquisition Regulation nor as imposing upon the parties to a project order agreement, responsibilities (legal or otherwise) not provided for in this chapter.”

     

    Suggestion:  I would suggest that you read the source documents that pertain to your question.  First, read DoD Financial Management Regulation (FMR) 1400-7R Volume 11A, paying particular attention to Chapters 1, and 2.  Second, read Title 41, United States Code (USC), section 6307.  Third, it may be helpful to read the Treasury Financial Manual (TFM), Chapter 4700 and DoD Instruction 4000.19, and visit the Office of Federal Procurement Policy (OFPP) website.  Finally, it is most strongly recommended that you contact your local comptroller organization, and legal counsel for more information and their policy interpretation of this issue.

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