How should FM fund Labor Rate adjustments? Is it tied to the original Funds awarded on the contract (which would make it a UOA)? is it Bona Fide need of the FY the rate changes took affect? Or can we use any active year dollars we have available?
This response is based on the information provided. We suggest you discuss with your Comptroller, contracting team, program manager and/or legal department as appropriate.
Based on the information provided, it appears this labor rate change would be in-scope. You did not provide the Appropriation type but RDT&E, PROC or O&M would all be expired by now. As long as this is in-scope work, the I believe you would be able to request an Upper Obligation Adjustment and use the funds that are already obligated. If you do not have funds available, then you would have to seek reprogramming of funds from that Fiscal Year and Appropriation. If the funds have cancelled (which might apply if these are O&M funds) then you would be able to use any currently available funding of the original obligation.
A discussion with the Comptroller or funds certifier and possibly the legal office will assist you in the event that GAO comes back to question the manner in which you funded these labor rate adjustments.