Can we use FY18 funds to purchase the renewal of the software license agreement with service to begin 1 October 2018?
The question you have asked concerns using FY 2018 O&M funds for an effort that does not begin until 1 October 2018 (FY 2019). You cannot use FY 2018 O&M funds for an effort that does not begin until FY 2019 as this violates the Bona Fide Need Rule and also the Annual Funding Policy. However, due to the exception to the Annual Funding Policy that states you can cross fiscal years using a current year appropriation as long as the contract does not exceed 12 months. You could start the contract in September of 2018 using FY 2018 O&M funding with an end date not to exceed 12 months. It is not good practice to have a contract that begins on 1 October of any fiscal year as normally DOD is under a Continuing Resolution operating off a limited amount of funding.
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I suggest you work with the Comptroller and Contracting Officer to move the contract start date to September of 2018 using FY 2018 funds and crossing into FY 2019 without exceeding a 12 month period.