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  • Question

    If the SAC proposes no cut, will this go to a committee? How likely will a mark against my budget result in an actual decrease and if so what obstacles are faced when accomplishing a Reprogramming Action to recover funds after a reduction of funds following a congressional mark? Assuming we learn this cut will occur and we decide to accomplish a reprogramming action, can you explain what is meant by "without prejudice "Per AFI 65-601 para 2.3.3.4, DoD componenets can't reprogram funds for an item or program denied or reduced by the Congress, unless there is positive indication that the Congress reduced funds for a program "without prejudice". The phrase "without prejudice" means that congress permits the increase in funding within the limits in para 2.3.3.2. How would we know if the cut was "with" or "with prejudice"? Years ago, there's used to be a congressional tracker website to track marks. Is that still around? How do I research why a mark was laid in?


    Answer

    The HAC mark decreasing the requested budget amount should be appealed to the SAC for the FY12 PB amount. The SAC will consider the HAC mark and the DOD appeal, if presented, to the PB amount. If the SAC marks to the requested PB amount, as suggested in the question, both the HAC and SAC marks will be go to the Appropriations Conference for deliberation as described below. To determine if Congress is reducing funds requested "with or without prejudice" will require reading the associated report language.
     
    As the authorization and appropriations committees mark up the PB request, DoD tracks the mark-up and may submit appeals to these marks. Appeals may be made on the basis of committee changes to the dollars, quantities, manpower and/or language as originally requested in the PB. DoD appeals are transmitted under cover of a letter prepared by USD (Comptroller) and signed by the Secretary of Defense (SECDEF).
     
    DoD components will be requested to provide candidate programs for incorporation into the SECDEF letter. Only the component's highest priority appeal candidates will be submitted and all material must be unclassified. While responsibility for consolidation and coordination of all appeal materials resides with the USD (Comptroller), all appropriate offices are responsible to ensure materials submitted in support of appeal candidates remain up-to-date. Appeals are addressed to the chair of the next committee to take action on the budget request, or in the case of appeals to conferees, to the chairs of both the House and Senate committees.
     
    The authorization and appropriations processes normally proceed in a relatively parallel fashion. Consequently, by agreement with Congress, DoD appeals marks made in one of those processes only within that process' chain. Therefore, marks made by authorizers can only be appealed to an authorizing committee or conference, while marks made by appropriators can only be appealed to an appropriations committee or conference. When marks to budget amounts are appealed, the appeal will be to the amount that is closest to (but does not exceed) the PB request within the last two marks. If only one mark has been made, or if one or more marks exceeds the PB request, then the appeal will be back to the amount of the PB request. Appeals to marks should consider the most recent floor action on the committee mark, since amendments may have changed the mark.
     
    Assuming that the House committees have completed their mark-ups first, the sequence of appeals is usually as follows:
     
    In the Authorization Process:
    − To SASC. This appeal is based on the actions of the HASC, as modified by House floor action.
    − To Authorization Conference. This appeal is based on the actions of both the HASC and SASC, as modified by House and Senate floor action.
     
    In the Appropriations Process:
    − To SAC. This appeal is based on the actions of the HAC, as modified by House floor action.
    − To Appropriations Conference. This appeal is based on the actions of both the HAC and SAC, as modified by House and Senate floor action.
     
    If for some reason the Senate is the first to mark, then the appeals would be made to the next committee to mark, that being the House.
     
    For information about congressional marks and associated report language, contact the Program Element Monitor (PEM), a key player on the Air Staff and within the Office of Assistant Secretary of the Air  Force (Acquisition). Each USAF PE is assigned to a PEM who is the conduit between the using commands, Materiel Command, and the Air Staff, while also serving as the spokesperson for the program. His/her duty is to coordinate functional concerns across the Air Staff for all phases of PPBE. The AF Comptroller may also be contacted concerning congressional HAC/SAC marks and associated report language. Both the PEM and the AF Comptroller (appropriate appropriations manager) can provide advice about marks "with or without prejudice". 
     
    The OSD Comptroller and the Services' senior financial management officials each maintain legislative liaisons which serve as the primary interface between DoD and the two Appropriations Committees (i.e., HAC and SAC). These offices serve as the formal point of contact between Congress and DoD elements on appropriation issues, serve as a conduit of information concerning all Defense appropriations-based legislative matters and track all legislative items that may affect Defense appropriations.
     
    Another excellent source of information on the status of various legislative acts being considered by Congress is the “Thomas” website, an official site of the Library of Congress. The website address is STATUS OF CONGRESSIONAL ACTIONS OF VARIOUS ACTS http://thomas.loc.gov/ Once on the website, it is possible to initiate a search under the headings of “Legislation”, “Congressional  Record”, or “Committees”. To check the status of Congressional actions on pending legislation,  click on one of the links under the “Legislation” banner. There is also a separate link to check  the status of appropriations legislation.
     
    You are encouraged to discuss this matter with your PEM and the PEO/command comptroller or AF Comptroller as appropriate.
     
       
    FMR 7000.14-R, Volume 3 Chapter 10 Accounting Requirements for Expired and Closed Accounts June 2009
     
    Adjustments to Expired or Closed/Canceled Accounts. Increases or decreases to obligations or expenditures. Adjustments involve recording obligations or expenditures that were made or incurred, but not recorded, during the period prior to expiration or cancellation of the account.
     

    Unexpired Accounts. Appropriation or fund accounts in which the balances are available for incurring obligations because the time available for incurring such obligations has not yet expired. Audit requirements, limitations on obligations, and reporting requirements applicable to unexpired accounts must continue to apply after the end of the period of availability for obligation or expenditure of that account.
     
    Unrecorded Obligations. Obligations that were incurred legitimately during the period of fund availability, but were not recorded in the Component’s records prior to expiration of the appropriation or fund. For purposes of this guidance, “unrecorded” obligations are included in obligation adjustments. Current accounts may be used to pay previously unrecorded obligations chargeable to a closed account.
     
    Expired funds retain their fiscal year identity for 5 years after the time an appropriation expires (see Chapter 13, subparagraph 130208.B of this volume). Expired funds are not available for new obligations. Both the obligated and unobligated balances of expired appropriations must be available for recording, adjusting, and liquidating obligations properly chargeable to that account.
     

    100202. Implementation of Contract Change Provisions Within the Department of Defense
    A. Section 1553(c)(3) of title 31, U.S.C. defines a “contract change” as a change under which a contractor is required to perform additional work. Paragraphs 100204 and 100205 contain procedures for requesting approval of certain obligation adjustments for contract changes.
     
    B. Obligation adjustments, such as incentive or award fees and price inflation (escalation or economic price adjustments), are not considered contract changes for purposes of subparagraph 100202.A. To the extent otherwise appropriate, such amounts may be charged to applicable accounts that otherwise have expired for incurring new obligation but have not yet been closed/canceled. Such charges or adjustments must be supported by comprehensive written documentation containing a statement that the charges do not require, involve, or result in additional work or changes in scope. This statement must explain the circumstances, contingencies, or management practices that necessitated the adjustment.
     
    100204. Obligation Adjustments for a Contract Change in Excess of $4 Million. An obligation adjustment for a contract change under which a contractor is required to perform additional work may be incurred only if that obligation adjustment has been approved by the Under Secretary of Defense (Comptroller) (USD(C)), as designee of the Secretary of Defense. Approval must be sought when the amount of the obligation would cause the total amount of charges in any fiscal year for a single program, project, or activity to exceed $4 million and the account being used to fund such obligations no longer is available for new obligation.
     
    A. Requests for approval, if necessary, must be submitted by the applicable DoD Component to the Office of the Under Secretary of Defense (Comptroller) (Program/Budget) (OUSD(C)(P/B)).
    B. Requests for approval must include the following documentation:
    1. The amount to be obligated,
    2. The purpose for which the funds are to be obligated, and
    3. An explanation of the obligation adjustment including the reason for the adjustment and the contingencies or management practices which caused the need for the adjustment.
    C. Components must retain supporting documentation for future reference.
     

    100205. Obligation Adjustments for a Contract Change of $25 Million or More. Special handling is required to process any obligation adjustment to an expired appropriation for a contract change, under which a contractor is required to perform additional work, for amounts in any fiscal year of $25 million or more. Such adjustments may be made only after the USD(C), as designee of the Secretary of Defense, submits a notice of intention to make the obligation--along with the legal basis and policy reasons for the obligation--to the Armed Services and Appropriation Committees of the Senate and the House of Representatives.
    A. After 30 days have elapsed following submission of the notice, the proposed obligation may be recorded (unless any cognizant congressional committee notifies the USD(C) of its disapproval).
    B. Such charges or adjustments must be supported by a written comprehensive statement concerning the reason for the adjustment. This statement must explain the circumstances, contingencies, or management practices that caused the need for the adjustment.
    C. When notification to the Congress is necessary, the applicable DoD Component must submit to the OUSD(C)(P/B) the required documentation (including letters to the appropriate congressional committees for the USD(C) signature).
     
     

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