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  • August 5, 2024
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  • 2024/2025
  • Exam (elaborations)
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  • mock 2
  • mock 2 questions and correct answers elaboration

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Mock 2 questions
: 31 U.S.C. 1502(a); Principles of Federal Appropriations Law (GAO-04-261SP), the "Red Book"

The concept of the "legal availability" of Congressional appropriations is defined in terms of
three elements - purpose, time, and amount.

The Bona Fide Need rule covers the "time" aspect of legal availability and is one of the primary
means of congressional control over its appropriations.

The Bona Fide Need rule basically means that a federal agency must have a legitimate or "bona
fide" need for the requirement during the time period that the appropriation is available. It is
codified in 31 U.S.C. 1502(a), which says, "The balance of an appropriation or fund limited for
obligation to a definite period is available only for payment of expenses properly incurred during
the period of availability or to complete contracts properly made within that period of availability
and obligated consistent with Section 1501 of this titl - ANS-What is the "Bona Fide Need" Rule?

: FAR 43.201(b)

The contractor must continue performance of the contract as changed, except that in
cost-reimbursement or incrementally funded contracts the contractor is not obligated to continue
performance or incur costs beyond the limits established in the Limitation of Cost (fully funded)
or Limitation of Funds (incrementally funded) clause. - ANS-When the contracting officer
properly issues a unilateral change under the Changes clause, what responsibility does the
contractor have to continue performance?

· Non-commercial item government financing:
o Performance-based payments - payment upon objective defined events accomplished
***Preferred method!!!
o Progress payments- Payments based on costs incurred or % complete by the contractor as
work is done. (Customary rates are 80% LB, 90% SB, and 95% SDB; need adequate
accounting system.) Progress payments no more than 80% on UCAs)
o Loan guarantees - Government co-signs for the contractor with private sources and shares
losses
o Advance payments - paid in advance for the purpose of making advances to subcontractors -
(least preferred!) (Requires agency approval, need adequate security, interest may be required,
may be in addition to progress/partial payments)

· Commercial Item financing:
(1) Normally the contractor's responsibility to obtain financing, but in rare circumstances,
government can provide financing if over $100K, the CO determines that it is appropriate to -

,ANS-Name the methods of government financing available for commercial item financing and
for non-commercial item financing. Bonus points: give some characteristics of each method.

1 U.S.C. 1551-1558

Active means the period of time that you are permitted to use funds for obligation on a contract.
Usually that period of within the 12 months of a fiscal year, but there are multi-year
appropriations, such as R&D (3600) money, that has a two-year life span in active status.

All appropriations are cancelled 5 years after they cease to be active, and are no longer
available for any purpose, and are returned to the Treasury. Under PL 101-510, any use of
cancelled funds is prohibited and results in a violation of the Anti-Deficiency Act.

The period of time between when the appropriation is no longer active, and when it cancels, it is
expired, and it is only available to pay obligations that are properly chargeable to that account.
So for example...FY09 - 3600 money can be obligated on R&D requirements in FY09 and FY10.
Once you hit Oct 1, 2010, your 3600 money from FY09 will expire. Once it expires - ANS-You
are a PCO and a new trainee comes to you seeking advice. She says she just had a
conversation with a Financial Manager who referred to funds categorized by status as either
active, expired, or cancelled. She doesn't understand the differences. Can you explain the
differences between the 3 status categories?

AFI 65-601, V1, par. 6.3.7.5.; FAR 52.232-20 & -22 (Limitation of Cost/Funds Clauses)

: FY21 3400 funds. Change orders to cost reimbursement contracts with a
limitation of cost or limitation of funds clause that cause the contract ceiling to be exceeded, and
which are not based on antecedent liability, enforceable by the contractor, shall be charged to
funds legally available when the contracting officer grants the discretionary increase. The CO
must take the following corrective actions: If the CO intends to grant the increase, obtain FY21
3400 funds to fund the cost overrun via modification.

The CO could take a hard line in this case and tell the contractor that they were under no
obligation to incur the additional costs and that it is not the Government's responsibility to pay
them. But I would likely try to get some facts first. Was this overrun caused by existing
requirements on the contract, or was it for wor - ANS-The Contracting Officer (CO) awarded a
Cost-Plus-Fixed-Fee (CPFF) contract on 28 Sep 20. The contract was fully funded with FY20
3400 funds. The period of performance was from 28 Sep 20 to 27 Sep 21. On 01 Aug 21, the
contractor notified the CO that funds were at 75% expenditure rate in accordance with FAR
Clause 52.232-22, and an additional $50K was needed to complete performance. The CO
requested additional FY20 3400 funds from finance to cover the cost overrun. Based on the
above situation, are FY20 or FY21 3400 funds to be used on this overrun?

AFI 65-601, V1, par. 6.3.8.

, No, the work would be considered new and out of scope of the original terms of the contract.
The contract was awarded to tear down an existing road and reconstruct a new one. Adding
work to widen ramps and a concrete driveway clearly is not within scope of the original effort.
The CO must take the following actions: Obtain current year 3400 (FY20) funds to obligate to
fund the new work.

When contract changes increase the contract's scope, fund the additional work from
appropriations available for current obligation. Whether the contract scope has changed
depends on the unique facts and circumstances of each situation; analyze each case separately
to make this determination. - ANS-A Firm-Fixed Price (FFP) construction contract was awarded
26 Sep 19 with performance to be completed on or before 23 Feb 20. The work consisted of
demolition and disposal of all curb, gutter, sidewalk and site components necessary to construct
a new road, and the effort was funded with 3400 FY 19 (O&M) funds. On 26 Jan 20, it was
determined additional work should be accomplished to widen two (2) ramps to accommodate a
semitrailer truck and widen a concrete driveway entrance (not related to accommodate the
truck). The Contracting Officer requested additional FY19 O&M funding through the Upward
Obligation Adjustment Module (previously Obligation Adjustment Reporting System (OARS)) on
the basis that this work resulted from differing site conditions. Based on the above situation, is
FY 2019 O&M funding appropriate for this effort?

Authority: (FAR 19.201 & 19.202) AFFARS 5319.201, AFI 90-1801

1) The local Small Business office gets involved early in that they must coordinate on all
synopses prior to publication. This includes Sources Sought and Pre-Solicitation Synopses.
2) A Small Business Procurement Representative should be invited to participate in early
strategy sessions and Acquisition Strategy Panel (ASP) if appropriate for the acquisition.
3) The Small Business Specialist and an SBA representative must review all acquisitions in
excess of $25,000 (will follow up on this) and coordinate on a DD Form 2579, Small Business
Coordination Record.
4) A Small Business Specialist must be given an opportunity to review and comment on all
Acquisition Plans and Single Acquisition Management Plans (SAMPs). ASC/BC is a required
signature on the coordination page of the plans. - ANS-List some of the ways the Contracting
Officer should involve the Small Business Office (ASC/BC) and the SBA early and often in the
acquisition process in order to insure maximum opportunities, including subcontracting
opportunities, for Small Businesses.(

Authority: FAR 19.705-7

1. When a contractor fails to make a good faith effort to comply with a subcontracting plan,
liquidated damages shall be paid by the contractor.
2. The amount of damages attributable to the contractor's failure to comply shall be an amount
equal to the actual dollar amount by which the contractor failed to achieve each subcontract
goal.

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