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    Under Bona Fide Need - Repair and Maintenance: The FMR (Vol. 3, 080305) also provides for a year-end exception for repair and maintenance. This exception applies only to DoD and states that a project will be considered to have met the bona fide need of the prior FY if work is started by the end of the CY. As per the FMR, Vol III, Chapter 8, para. 080305 (B) states "If physical evidence of performance does not exist, and to prevent unwarranted default proceedings, the contractor may be requested to produce documentary evidence that cost has been incurred or material has been ordered to allow performance of the contract." Is there any further guidance that requires the materials ordered to be delivered to the job site or can the contractor keep that material in their own secured and insured facility and would evidence of that insurance or ownership be required.


    Answer

    The following is the information that was found addressing materials for construction projects.   In accordance with Fiscal Law DeskBook 2014, Chapter 3, Construction.

    1.Contracts for construction are considered as similar to non-severable service contracts. Construction contracts may constitute a bona fide need of the fiscal year in which the contract is awarded even though performance is not completed until the following fiscal year. However, the requirement to enter into the contract must exist during the funds’ period of availability. The contracting agency must intend for the contractor to begin work without delay.

    2. A determination of what constitutes a bona fide need of a particular year depends upon the facts and circumstances of a particular year (e.g. weather). Associate General Counsel Kepplinger, B-235086, Apr. 24, 1991. In analyzing bona fide needs for construction contracts, the agency should consider the following factors:

    a. Normal weather conditions. A project that cannot reasonably be expected to commence on-site performance before the onset of winter weather is not the bona fide need of the prior fiscal year.

    b. The required delivery date.

    c. The date the government intends to make facilities, sites, or tools available to the contractor for construction work.

    d. The degree of actual control the government has over when the contractor may begin work.

    (1) For example, suppose a barracks will not be available for renovation until 27 December 2012 because a brigade is deploying on 20 December and cannot be disrupted between 1 October and 20 December. If the normal lead-time for starting a renovation project of this type is 15 days, then the renovation is a bona fide need of FY 2013 and the contract should be awarded in FY 2013 using FY2013 funds. Accordingly, use of FY 2012 funds under these facts violates the Bona Fide Needs Rule.

    3. The DoD FMR allows agencies to obligate current year appropriations for maintenance and repair projects even though contractor performance may not begin until the next fiscal year. The contract shall satisfy a bona fide need of the current year. DoD FMR, Vol. 3, Ch. 8, para. 080303.D.

    a. Work must begin before January 1 of the following calendar year.

    b. To determine the commencement of work, the contracting officer should visually inspect the site or obtain documentary evidence that costs have been incurred or material ordered to allow performance of the contract.

     

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