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Posted by on Jan 20, 2016

Acquisition and Appropriations Law – Making the Connections

Acquisition and Appropriations Law – Making the Connections

contract, scope, bona fide needs ruleThere are many intersections between the two disciplines of Acquisition and Appropriations Law. Federal Acquisition managers more and more must have a fundamental working knowledge of Appropriations Law. Let’s review one of those important areas of connection: applying the Bona Fide Needs Rule with associated scope changes in a contract modification.

Contracting officers must certainly be familiar with the Bona Fide Needs Rule/Law (31 USC 1502) to ensure proper year fund use. This seminal doctrine within the body of Appropriations Law states in simple terms that current year funds must be used/obligated for current year contracted needs. Program and financial officials often work closely with acquisition professionals to determine which fiscal year funds should be used with a purchase request particularly on matters related to bona fide need determinations.

When Federal acquisition and financial managers are making contract scope change determinations under the Bona Fide Needs Rule, the proper fiscal year funding source is particularly important and sometimes complex. If incorrect year or source funds are used an Antideficiency Act violation may occur.

Many agency Financial Management Regulations (FMRs) – including the voluminous DoD FMRs – stipulate the contracting officer is primarily responsible for determining whether a contract modification is within the scope of a contract. In making such a determination, a contracting officer must be guided by appropriate provisions of the Federal Acquisition Regulation (FAR), the appropriate agency FAR Supplement, legal principles applicable to scope changes, and the provisions of agency financial management regulations.

If a contract modification is determined to be outside the scope of the original contract (primarily changes in quantity, cost, or time period of the original contract) then current year funds must be used in accordance with the Bona Fide Needs Rule. If a scope change is not involved, such as properly invoking the contract changes clause, then original year funds (which may now be in an expired status) may be properly used.

Again there are many intersections between the disciplines of acquisition and Appropriations Law. What other areas do you particularly see and deal with? We will cover those suggested and other related areas of these two disciplines in future blogs.


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