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    Can we make the hardware purchases now in FY23 when the funds were placed on contract in FY22? Reminder, these are FY22 O&M funds and we are trying to procure the hardware now in FY23.


    The rules are very clear on the life cycle of different appropriations, or "colors of money". O&M funds are available for new obligations & payments for only one year. When you failed to purchase the hardware in FY22, those funds expired. Those FY22 funds are only available for upward obligations, adjustments, and payments on prior obligations, but not on new purchases.  Attempting to do so would be a violation of the Bona Fide Needs rule, which requires funds to be used only for needs or services in the year of the appropriations obligation period.

    If you still need the hardware, you will need to procure it with FY23 funding. Check with your contracting officer or the budget office to determine if your purchase qualifies for one of the two supply exceptions to the Bona Fide Needs rule listed below: 

    •The lead-time exception allows the agency to consider the normal production lead-time when determining the bona fide need for supplies that are not available off the shelf.

    •The stock level exception allows agencies to purchase enough supplies to maintain sufficient stock levels., 


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