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  • Question

    How can you use FY20 funds for a FY21 requirement if your RAD package references the Bona Fide Need Rule? Wouldn't the funding need to be FY21 or FY22 funding?


    Answer

    After follow-up with the question submitter, it was confirmed that the use of FY20 funds for the upcoming modification would in fact have violated of the bona fide needs rule. A modification within the general scope of the contract that does not increase the contract price can properly be charged as an obligation of the year in which the contract was executed. However, if the modification exceeds the general scope of the original contract (e.g., increasing the quantity of items to be delivered), then the modification creates a new obligation and is chargeable to funds current at the time the modification is made.

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