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  • Question

    Who has final authority to make this determination and why?


    Answer

    1. The FAR references quoted below in pertinent part are applicable to this response.

    FAR 1.602-1 -- Authority
    (a) Contracting officers have authority to enter into, administer, or terminate contracts and make related determinations and findings.

    (b) No contract shall be entered into unless the contracting officer ensures that all requirements of law, executive orders, regulations, and all other applicable procedures, including clearances and approvals, have been met.

    FAR 1.602-2 -- Responsibilities.
    Contracting officers shall --
      (a) Ensure that the requirements of 1.602-1(b) have been met, and that sufficient funds are available for obligation.

    FAR 32.702 -- Policy
    No officer or employee of the Government may create or authorize an obligation in excess of the funds available, or in advance of appropriations (Anti-Deficiency Act, 31 U.S.C. 1341), unless otherwise authorized by law. Before executing any contract, the contracting officer shall --
      (a) Obtain written assurance from responsible fiscal authority that adequate funds are available.

    2. The following references quoted below in pertinent part are also applicable to this response.

    A. DoD 7000.14-R, Financial Management Regulation, Volume 14, Chapter 2 (Sep 2015)
    https://comptroller.defense.gov/Portals/45/documents/fmr/current/14/14_02.pdf

    Section 020401. Requirements.
    020401.B.3: Identify key fund control personnel, incorporate the provisions of this volume into key fund control personnel training programs, require that key fund control personnel receive appropriations law training at least every three years, maintain the documents that identify key fund control personnel, and maintain documents that confirm completion of the appropriations law training. Key fund control personnel are those responsible for the proper assignment of funding on a commitment or obligation document before the obligation is incurred. Examples are resource managers, fund holders, funds certifying officials, and authorizing officials.

    020401.B.4: Ensure key fund control personnel coordinate with requiring officials, such as program managers, contracting officers, and engineers, to verify that requests comply with funding statutes applicable to the assignment of funding on a commitment or obligation document before the obligation is incurred.

    B. GAO Principles of Federal Appropriations Law, Vol I, Jan 2004, GAO-04-261SP
    https://www.gao.gov/products/GAO-04-261SP

    Page 5-11, first paragraph: “The bona fide needs rule is one of the fundamental principles of appropriations law: A fiscal year appropriation may be obligated only to meet a legitimate, or bona fide, need arising in, or in some cases arising prior to but continuing to exist in, the fiscal year for which the appropriation was made.”

    Page 5-13, second paragraph: “While the rule itself is universally applicable, determination of what constitutes a bona fide need of a particular fiscal year depends largely on the facts and circumstances of the particular case. 70 Comp. Gen. 469, 470 (1991); 44 Comp. Gen. 399, 401 (1965); 37 Comp. Gen. at 159.”

    3. As stated in FAR 1.602-1(a)&(b) and in FAR 1.602-2(a), the contracting officer does have the sole authority to award contracts and must insure that all requirements of law (including fiscal law) have been met before entering into a contract. But, FAR 32.702(a) also states that the contracting officer must obtain written assurance from responsible fiscal authority that adequate funds are available. On the other hand, DoD 7000.14-R Vol 14, Chapter 2, section 020401.B.3 states that due to their periodic, extensive training in fiscal law, funds control personnel are responsible for the proper assignment of funding on a commitment or obligation document before the obligation is incurred. But, section 020401.B.4 states that funds control personnel must also coordinate with the contracting officer to verify compliance with funding statutes applicable to the assignment of funding on a commitment or obligation document.

    4. In reading these regulatory requirements together, it is our view that a contracting activity’s general expectation is that both the contracting officer and the funds control personnel will cooperatively resolve any funds availability issues that may arise, including issues pertaining to the proper application of the Bona Fide needs rule. As indicated in reference 2B above, the determination of what constitutes a bona fide need of a particular fiscal year depends largely on the facts and circumstances of the particular case. Consequently, rather than attempt to respond to this question directly, we recommend that the contracting officer, the cognizant funds control personnel, and a representative from the requiring organization meet jointly with agency legal counsel to discuss the facts and circumstances in this case. The purpose of this conference would be to obtain a legal opinion as to the correct interpretation of fiscal law covering the Bona Fide needs rule that should be applied in this case, and the resulting fiscal year funding that may be appropriately assigned to the obligation document.




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