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  • Question

    How long does type C services last for? One year? length of the construction project? Can you pay whole amount up front (meaning a,b and c at same time on award)? Or is the funding only good for one full year and type c services should only be added to award when the construction award is created. Thank you


    Answer

    Operations and Maintenance (O&M) Funds

    Operations and Maintenance (O&M) funds include many separate appropriations (e.g., Operations and Maintenance Army, Operations and Maintenance Navy, Operations and Maintenance Marine Corps Reserve, Operation and Maintenance Air National Guard, etc.). O&M appropriations traditionally finance those things whose benefits are derived for a limited period of time (e.g., expenses, rather than investments). Examples of costs financed by O&M funds are headquarters operations, civilian salaries and awards, travel, fuel, minor construction projects less than $2M, expenses of operational military forces, training and education, recruiting, depot maintenance, purchases from Defense Working Capital Funds (e.g., spare parts), base operations support, and assets with a system unit cost less than the current expense/investment threshold ($250K). O&M appropriations are normally available for obligation for one fiscal year. O&M appropriations are budgeted using the annual funding policy.

    In accordance with FAR 37.106(a), it states the following:

    (a) When contracts for services are funded by annual appropriations, the term of contracts so funded shall not extend beyond the end of the fiscal year of the appropriation except when authorized by law (see paragraph (b) of this section for certain service contracts, 32.703-2 for contracts conditioned upon availability of funds, and 32.703-3 for contracts crossing fiscal years).

    DFARS 237.106(2) states:

     (2) The contracting officer may enter into a contract, exercise an option, or place an order under a contract for severable services for a period that begins in one fiscal year and ends in the next fiscal year if the period of the contract awarded, option exercised, or order placed does not exceed 1 year (10 U.S.C. 2410a).

    Also, work with your legal and funding personnel.

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