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  • Question

    Can a warranted FAR Based KO use non appropriated funds to obligate the Government?


    Answer

    A warranted FAR based KO cannot use non-appropriated funds to obligate the Government. 

    Per the FAR 1.104 Applicability: The FAR applies to all acquisitions as defined in part 2 of the FAR, except where expressly excluded.

    Acquisition is defined in FAR 2.101: "'Acquisition' means the acquiring by contract with appropriated funds of supplies and services by and for the use of the Federal Government through purchase or lease…”

    Contract is defined in FAR 2.101, "Contract’ means a mutual binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds and that, except as otherwise authorized, are in writing…”

    The Foreward of the FAR states, "The FAR is the primary regulation for use by all executive agencies in their acquisition of supplies and services with appropriated funds."

    Since you are asking about a FAR based KO, when it comes to using non-appropriated funds, the FAR does not apply.

    However, like with most things, some agencies have exceptions.  The Navy has SECNAVINST 7043.5C dated 03 May 2021.  This instruction is titled “NONAPPROPRIATED FUND PROCUREMENT POLICY” and establishes a NAF procurement policy within the Department of the Navy (DON) for MWR, Military Resale, and Construction.

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