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    Can we still de-ob and re-ob to correct this administrative error?


    Yes, I think you can De-ob/Re-ob expired funds for an administrative correction to the contract.  The Office of Management and Budget (OMB) specifically addresses this issue for all Federal Agencies in their Circular No. A-11, Section 20.4.c (Page 17 of Section 20).  DoD has taken the OMB guidance and put forth their own policy regarding Expired funds in FMR, Vol 2A, Ch 1, Paragraph 010107, Section B.25.  In that Section it states, “Expired Appropriation. An appropriation whose period of availability for incurring new obligations has expired but the appropriation is not closed (canceled).  During this period, the appropriation is available for adjustment to, or payment of, existing obligations.  Appropriations remain in an expired status for 5-years as shown in the table below.  At the end of the five-year expiration period, the appropriation is closed (canceled) and is no longer available for the payment of unliquidated obligations. (See Closed (Canceled) Appropriations.).”

    Here's how the policy works for O&M funds.   O&M obligations for new projects have to be made by 30 September of the first fiscal year of the fund’s availability.  That one year period for O&M funds is known as its Current (Unexpired) Phase.  During that Current Phase, besides being able to obligate for new projects, or adding funds to a project for out-of-scope (new) work, the funds can be used (expended) to pay bills that were incurred during that first year.  

    On 01 October of the second fiscal year, the O&M funds enter their 5-year Expired Phase.  During the Expired Phase, the funds retain their identity (Fiscal Year, Appropriation, and Program Element) and unobligated amounts are controlled at the Service level.  During the Expired Phase the O&M funds can be used (expended) to pay bills that were incurred during years two through six on existing obligations.  In addition, during the Expired Phase, O&M funds, with the same identity, can be obligated for upward adjustments for in-scope, NOT new out-of-scope, work of the existing project.  Upward adjustments could be caused by unanticipated increases in labor, material, or indirect costs.

    On 01 October of the seventh fiscal year, the O&M funds enter their Cancelled (Closed) Phase.  During the Cancelled Phase, the funds are no longer available for obligations, or expenditures, of any kind.  If bills arise from work that was funded with the now Cancelled O&M funds, those bills must be paid using O&M funds that are in their Current Phase.

    Finally, I recommend that you contact your PCO, your local financial comptroller organization, and acquisition legal counsel for more information and their policy interpretation of this issue.

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