Sign In
  • Question

    How can we contractually and legally extend the O&M funds to allow the government to get the services we paid for and the contractors to get paid? We do not want to see this money go to waste.


    Answer

    Yours is a problem that many in federal contracting face, but it can be particularly challenging in a deployed environment. However, if an effort is funded with annual O&M funds, the period of performance cannot go beyond the first 12-month period unless it is for a nonseverable effort. A nonseverable effort is a single undertaking that cannot be feasibly subdivided, such as a prolonged consulting study that leads to a report as the deliverable. In contrast, service contracts where the services are continuing and recurring in nature, such a vehicle maintenance contracts, are considered to be severable. It would be a violation of the Bona Fide Needs rule of the Antideficiency Act to extend O&M funds past the 12-month availability period, as doing so would obligate the Government for the payment of money after the appropriation to be charged was still available (i.e., after the initial 12 month period). Extending the 12-month availability period can only be authorized for nonseverable contracts. 

    A concise but informative discussion of the topic can be found at this ACQuipedia article on the Bona Fide Need rule.

    Open full Question Details