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  • Question

    If I am doing an R&D Contract using R&D funds, am I required to do a D&F to use multiyear contracts for a 2 year base R&D contract?


    Answer

    This response is based on the information provided.  We suggest you discuss with your contracting team, program manager and/or legal department as appropriate. 

     

    We believe you are referring to a multiple year contract rather than multi-year contract.  Multiple year contracts are a base year with options.  Multi-year contracts generally are for very high dollar production efforts requiring Congressional notification among other things.  Again, without knowing more about your acquisition, these are some general rules.  RDT&E is governed by the Incremental Funding Policy which means you ask for funds to cover the costs you expect to incur for that fiscal year.  Ultimately, you will have to request funding to obligate for each year of the contract to include each base year and the option years.  Even though you have 2 years to obligate RDT&E funding, you should only request budget for one fiscal year based on the expected costs to be incurred. The contract type does not matter when it comes to the correct funding policy to use.  See the Financial Management Regulation (FMR) 7000.14-Volume 2A Chapter 1 010214 which states:    "The incremental budgeting policy provides that only those funds required for work in a given fiscal year shall be included in the RDT&E budget request for that fiscal year for most classes of effort."

    The requirement for the determination and finding is driven by the use of options, not the type of funds.

    "FAR .702 General.

          (a) A D&F shall ordinarily be for an individual contract action. Unless otherwise prohibited, class D&F’s may be executed for classes of contract actions (see 1.703). The approval granted by a D&F is restricted to the proposed contract action(s) reasonably described in that D&F. D&F’s may provide for a reasonable degree of flexibility. Furthermore, in their application, reasonable variations in estimated quantities or prices are permitted, unless the D&F specifies otherwise.

         (b) When an option is anticipated, the D&F shall state the approximate quantity to be awarded initially and the extent of the increase to be permitted by the option."

     

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