Minimum Quantity on IDIQ

Your duty under an IDIQ contract is to ORDER the minimum.  Whether you fully fund or incrementally fund an order is irrelevant, the fact is that you ORDER'ed the minimum.  I assume you will be using the Limitation of Cost or Limitation of Funds clause (FAR 52.232-20 or -21), or the clause at DFARS 252.232-7007, Limitation of Government’s Obligation.

Who can predict the future?  If you are unable to provide the next funding allotment, then you can deal with that problem at that time.

KingWink said:

We have R&D funding for this effort so the plan is to incrementally fund CLINs 0001 & 0002

If you are with DoD, you are required to fund the minimum quantity when the contract is issued.  In other words, issuing a contract with the minimum quantity creates a liability that needs to be recorded.

Retreadfed said:

If you are with DoD, you are required to fund the minimum quantity when the contract is issued.  In other words, issuing a contract with the minimum quantity creates a liability that needs to be recorded.

Retreadfed,

I couldn't find a requirement in the DFARS to fund the minimum when an indefinite-delivery contract is issued.  I looked in 216.5, Indefinite-Delivery Contracts, and 232.7, Contract Funding.

It is true that the agency must record the obligation of the minimum, but that can be done internally on the books of the agency without obligating funds on a task or delivery order.  DoD 7000.14-R, Financial Management Regulation, Vol. 3, Ch. 8, section 080604 requires recording of the minimum as an obligation upon execution of the parent indefinite-delivery contract, but does not require immediate issuance of a task or delivery order funding the minimum.  According to the FMR, additional recordings need only occur once cumulative task or delivery order funding amounts exceed the already-obligated (and already-recorded) minimum amount.

Recording need not be the same as funding.

ji20874 said:

Recording need not be the same as funding.

In what way(s)? Within context, it seems recording is tantamount to funding and vice versa, but not necessarily issuing an order. (based on the rules regarding over- or underrecording)

I guess what I am really questioning is if you can have recording without funding or funding without recording. I should revist the definitions of Fiscal Law terms like appropriation, commitment, obligation, and recording. (appropriation is probably the real 'funding')

Reminds me of this myth-busting post:

Jamaal, 

In order to understand correct principles, think back to the old days when things were done manually -- in the old days, a contracting officer created an obligation by signing a contract (with a funds commitment document in the file) -- then, days or weeks later, the agency comptroller recorded the obligation on the books of the agency.  If there was a dispute in the meantime, or if the comptroller never did the recording, the contractor still had a valid contract in hand.  Payment could not happen until the obligation was recorded.

Contracting officers obligate.  Comptrollers record.

Obligation happens in a contract.  Funding commonly happens in a contract, but funding (and obligating beyond the minimum) for an indefinite-delivery contract happens at the order level.  Recording happens on the books of the agency.

Absolutely, these are different.  These are not the same.

What has happened over time is that agencies have adopted automated systems, and the contracting officer's automated system for creating contracts (creating obligations) feed into the comptroller's system for recording obligations.  So when the contracting officer pushes the button in his or her system, both obligating and recording occur simultaneously.

But these are still different actions.

Nowadays, people erringly think of these as the same thing -- and they erringly think that the contracting officer does the recording.  They don't understand correct principles.  In forums like this one, we have professional dialogue to sharpen our learning.

Yes, you can have funding without recording.  If a contracting officer signed a normal (non-ID) contract last week but the recording doesn't happen until next week, there will be a few weeks between funding and recording.

Yes, you can have recording without funding.  If a contracting officer signed an indefinite-delivery contract last week without a simultaneous task or delivery order (no funding), the comptroller will have recorded the minimum obligation on the books of the agency.  Then, next week, the contracting officer might start issuing task or delivery orders.  There will be a few weeks between recording and funding.

@ji20874 thank you ... I see what you mean. You're correct; they are different actions.

I should have directed my thoughts to contract funding pursuant to FAR Subpart 32.7:

"No officer or employee of the Government may create or authorize an obligation in excess of the funds available, or in advance of appropriations (Anti-Deficiency Act, 31 U.S.C. 1341), unless otherwise authorized by law. Before executing any contract, the contracting officer shall --

(a) Obtain written assurance from responsible fiscal authority that adequate funds are available or

(b) Expressly condition the contract upon availability of funds in accordance with 32.703-2."

Funding can described as the appropriation (or continuing resolution) and administrative commitment of an appropriation (FAR 32.702(a)). These happen in advance of an obligation (e.g., IDIQ minimum guarantee). Contract funding can be fully funded, partially (incrementally) funded, or subject to the availability of funds. After an obligation is funded and created it must be recorded within a timeframe.

Requirements to fund obligations, by issuing an order, when awarding IDIQ contracts in the Air Force are based on a supplement stating:

"obligation shall be recorded based upon the issuance of a delivery or task order for the cost/price of the minimum quantity specified...Recording and subsequently reporting the required obligation using anything other than a delivery or task order will result in the action not being reported in FPDS-NG. (See DoD 7000.14-R, Volume 3, Chapter 8, paragraph 080604)."

Appropriation – Legal basis for withdrawing funds from the treasury and may contain specific provisions for specific expenditures.

Commitment – an administrative reservation of funds from a responsible fiscal authority in anticipation of future obligation.

Obligation – act legally binding the Government to make payment.

ji, you are correct and I used a bad choice of words.  What I intended to convey is that the agency must have funds available to cover the minimum when an IDIQ contract is awarded and must record that minimum amount as an obligation (liability) at the time the contract is awarded.

ji20874 said:

Obligation happens in a contract.  Funding commonly happens in a contract, but funding (and obligating beyond the minimum) for an indefinite-delivery contract happens at the order level.  Recording happens on the books of the agency.

Absolutely, these are different.  These are not the same.

What do you mean by "funding"?

Don Mansfield said:

What do you mean by "funding"?

I don't have a personal definition, but you can figure it out.  An indefinite-delivery contract creates an obligation, and causes a recording, but does not provide funds.  An order under that contract will provide funds (and may also create a further obligation and cause another recording).

ji20874 said:

I don't have a personal definition, but you can figure it out.  An indefinite-delivery contract creates an obligation, and causes a recording, but does not provide funds.  An order under that contract will provide funds (and may also create a further obligation and cause another recording).

What do you mean by "provide funds"?

You already know what it means.

I know what I would mean if I used those words, but I don't know what you mean.

Chapter 7 of the GAO Redbook discusses the creation of an obligation of appropriated funds, recording of an obligation of appropriated funds, but does not cover what you believe to be distinct in the context of contracting--"providing funds" or "funding".

So, what do you mean by "providing funds"?

Well, you might not be able to figure it out, but the rest of our readers can.

But to help you, Don, think of the context.  Both an indefinite-delivery contract and an order going beyond the minimum create obligations and cause recordings.  And yet there is still a difference between an indefinite-delivery contract and an order.  When you figure that out, you will know what I mean in this context by providing funds.  

I am pretending like your question is honest intellectual inquiry.  If you object to what I wrote, why don’t you offer something constructive for our readers?

ji20874 said:

When you figure that out, you will know what I mean in this context by providing funds.

Nope. Still no idea what you mean.

Does anybody know what ji means? According to him, if you are reading this thread you know.

I presume the context is:

On 6/1/2019 at 7:55 AM, ji20874 said:

I couldn't find a requirement in the DFARS to fund the minimum when an indefinite-delivery contract is issued.

Recording need not be the same as funding.

In my mind, the Antideficiency Act is the universal requirement to fund obligations. The act prohibits federal agencies from obligations or expending federal funds in advance or in excess of an appropriation.

I don't think a universal definition of fund, funds, or funding has been used in this thread. Seems some are suggesting that funding occurs when an order with line of accounting is issued to a contractor. Some seem to think funding can come later - seemingly distinguishing between recording and funding, but not addressing ADA. I believe funding occurs much earlier during appropriation and commitment. No need for a mystery or guessing game though...everyone can explain what they mean.

I haven't found a universal usage in FAR and its supplements neither. For example, what does 'obligate funds' mean here:

5316.504 Indefinite-Quantity Contracts

(1) See MP5316.504 for the requirement to obligate funds when awarding indefinite-delivery indefinite-quantity (IDIQ) contracts.

However,  FAR Subpart 32.7, Contract Funding, which I cited earlier offers some insight:

Jamaal Valentine said:

No officer or employee of the Government may create or authorize an obligation in excess of the funds available, or in advance of appropriations (Anti-Deficiency Act, 31 U.S.C. 1341), unless otherwise authorized by law. Before executing any contract, the contracting officer shall --

(a) Obtain written assurance from responsible fiscal authority that adequate funds are available or

(b) Expressly condition the contract upon availability of funds in accordance with 32.703-2.

(bold emphasis added)

Jamaal Valentine said:

I don't think a universal definition of fund, funds, or funding has been used in this thread.

I agree.  I suggest a read of GAO Redbook Chapter 2.  I suggest further that we as professionals should stick to appropriation, apportion, commitment, and obligation when discussing contracts  and quit trying to justify use of terms that are not well defined nor universally used.

Sorry but "fund" or "funding" a contract doesnot work me except in the circumstance where Congress has specifically so stated for a specific contract.

For the most within agency process there is appropriation, apportion, commitment, and obligation and throw in recording if you want.  But please not fund or funding.

Quote

On 5/31/2019 at 6:55 PM, ji20874 said:

Recording need not be the same as funding.

Add me to the list of readers not believing the word "funding" is meaningful in the procurement realm. 

It is merely short-hand customers use to describe budgeting, commitment, obligation, expenditure, and/or disbursement.   When someone has an "unfunded requirement", it means a project with no funding component identified.  Sponsors fund; customers fund; Congress funds. Procurement starts with a commitment of funds, not "funding".

Now; let's discuss the meaning* of the term "allotted funds" as used in 52.232-22 -- Limitation of Funds....

(* NOT "definition")

On 6/2/2019 at 12:11 AM, C Culham said:

For the most within agency process there is appropriation, apportion, commitment, and obligation and throw in recording if you want.

In the acquisition world, isn't an apportionment synonymous with a commitment (i.e., appropriations are apportioned into discrete commitments)?

REA'n Maker said:

In the acquisition world, isn't an apportionment synonymous with a commitment (i.e., appropriations are apportioned into discrete commitments)?

https://www.gao.gov/mobile/products/PAD-80-5

Dated I know.

 I may have erred in mentioning appointment but wanted to track from appropriation to commitment in that I view apportionment as making an appropriation available to an agency from which they will then commit the apportionment for a specific purpose such as a purchase request.

REA'n Maker,

We're talking specifically about contract obligations.  Some contract actions (such as some indefinite-delivery contracts) create obligations and cause recordings without providing or citing funds (such as the obligation for the minimum quantity or amount).  Some other contract actions (such as some task or orders under indefinite-delivery contracts) create obligations and cause recordings while providing or citing funds (such as for a purchase).  We need to be able to tell the difference between these, where both create obligations and cause recordings but only one provides or cites funds.

ji20874 said:

Some contract actions (such as some indefinite-delivery contracts) create obligations and cause recordings without providing or citing funds (such as the obligation for the minimum quantity or amount).

So would there be an obligation of appropriated funds? Yes or no.

If no, then what would be obligated?

By the way, when you make a claim, you have the burden of proof. If you can't (or won't) bear the burden, then intellectual humility demands that you retract your claim.

Readers,

For fun, I suggest you read this and evaluate how well ji is doing in this thread. Is he supporting his assertions with facts and evidence? Is he responsive to critical questions regarding his claims? Are his assumptions reasonable? Do you see any evidence of intellectual virtues or vices?

habitual offender

rehabilitation unlikely

recidivism likely

Look everyone please go here.  Acquisition or not the terms and their definitions in this document are what counts.  Not what we want to invent or coin ourselves.

https://www.appropriations.senate.gov/download/glossary-of-terms-used-in-the-federal-budget-process

Carl,

The document you provided defines "obligation," but does not differentiate between (1) contract actions (such as some indefinite-delivery contracts) that create obligations and cause recordings without providing or citing funds (such as the obligation for the minimum quantity or amount); and (2) contract actions (such as some task or orders under indefinite-delivery contracts) that create obligations and cause recordings while providing or citing funds (such as for a purchase).

Sometimes, as contracting officers, we need to differentiate between these two.  You object to my use of the word "funding" to address providing or citing funds within a contract action, but have not provided a better word.

The word "funding" is commonly used for this purpose, your objections notwithstanding.  Here's several instances from a single Wifcon thread where the word was used without objection by esteemed colleagues--

Retreadfed:  

• ...don't get recording of an obligation and providing a fund cite on a contract confused...

Matthew Fleharty:  

• ...The issue of "obligation" is separate from "funding"...
• ...The two are often conflated/married together...
• ...See how the terms "obligation" and "funds" come up together consistently, yet also notice how they are separate...

Vern Edwards:  

• ...Obligation is the act of making a contractually binding promise to pay for something with appropriated funds...
• ..."Funding" a contract means that (1) a CO has made an obligation, (2) the CO has funds, and (3) the CO has commenced the process of recording an obligation by citing the long-line funds account on a contract document and distributing a copy of that document to the finance office...

These come from a thread on incremental funding, rather than indefinite-contract minimums, at /threads/3936-guaranteed-minimum-fully-funded-in-fy

I agree that the word "funding" can have multiple meanings and can be confusing, but in the context of this thread, there was no confusion in my use of "funding" to describe providing or citing funds within a task order, in contrast to an indefinite-delivery contract where funding is not usually provided or cited within the contract (even though funds are obligated and a recording is made).

But still, since you object, what is the word to use?  I don't require an official term from an official document, but a term so I don't offend when differentiating between (1) contract actions (such as some indefinite-delivery contracts) that create obligations and cause recordings without providing or citing funds (such as the obligation for the minimum quantity or amount); and (2) contract actions (such as some task or orders under indefinite-delivery contracts) that create obligations and cause recordings while providing or citing funds (such as for a purchase).  "Obligate" and "record" are too imprecise, as both of these can occur without providing or citing funds within the contractual document.

It’s been a while since I was involved in these kind of financial details but I believe the proper action is for the finance/comptroller office to record a contingent liability.  The minimum IDIQ amount is a contingent liability like a lawsuit, personal action pending arbitration, future payroll, or a contractual contractor claim.  It gets recorded in the books/system.  The contingent liability gets backed up when the minimum gets met either an a order meeting some need or ordered specifically for purposes of satisfying the minimum need. 

In this case there’s no need for an actual order covering the minimum to get obligated at time of award.  But the finance people need to be aware of it and record the contingent liability.  It’s an obligation of current year funds.   It’s similar to a contractor submitting a claim under a contract.  It might take years to resolve but the government ends up having to pay and required to record this at time the contingency occurs.

This gets recorded as an obligation of the government and usually is replaced when an order is issued by the CO satisfies the minimum.

ji20874 said:

Carl,

The document you provided defines "obligation," but does not differentiate between (1) contract actions (such as some indefinite-delivery contracts) that create obligations and cause recordings without providing or citing funds (such as the obligation for the minimum quantity or amount); and (2) contract actions (such as some task or orders under indefinite-delivery contracts) that create obligations and cause recordings while providing or citing funds (such as for a purchase).

@ji20874

Enjoy your read of this!  

/legacy/reg/0835041dee47ca6e.html

And to help a little more, in my career I worked in budget and finance and actually posted to the "books". I am sorry your description of what we did with the stubby pencil in those day is not accurate.  Here is what we did and shall be done today but folks are sloppy and messy and do not.

IDIQ Award - An obligation was recorded on the books in the amount of the minimum.  A fund citation was needed to do so and was required or the contract was returned to acquistion.

T or D Order - The order amount was recorded on the books in the amount it stated.  Fund citation provided to do this.

IDIQ - A modification (usually it was an administrative one) was required from acquisition to reduce the minimum by the amount of T/D order.  This was required until the minimum was reached ergo there was no longer a obligation on the books for the IDIQs minimum.

Now folks (aqm and finance), erroneously in my view, try all kinds of tricks that makes the process of properly obligating an IDIQ sloppy and messy and in some cases not in accord with required statute and regulation. By my experience the slop and mess came about when multiple award IDIQs became a thing  in an attempt to appease program folks who whined about needing enough money to cover the multiple minimums.

formerfed,

Your general description is correct.  I don't know if contingent liability is the right word, and I hope others here won't gang up on you if it isn't, but I agree with your general description.

Carl,

I agree that things have been made sloppy, but my recollection is accurate.

Different agencies do things differently.  Many years ago, the Air Force allowed for indefinite-delivery contract awards without funds citations in the contracts and without simultaneous task or delivery orders -- that was (and still is) legal and honorable.  Of course, recordings were made on the books of the agency to comply with the recording statute, even though the funds citations were not printed in the contracts, as formerfed describes.  Then, the Air Force started requiring simultaneous task or delivery orders to cover the minimum with funds citations in the orders -- that is also legal and honorable.  I worked for the Air Force when the change happened.

My current agency and the one I worked for before this (both cabinet departments) allow for indefinite-delivery contract awards without funds citations in the contracts and without simultaneous task or delivery orders -- remember, this is legal and honorable, and recordings are made on the books of the agency even though the funds citations are not printed in the contracts.  The agency can issue task or delivery orders for the minimum at any time during a contract's ordering period.  Many people with an Air Force or DoD background will say this is wrong, but they say so because that is how they learned.  However, as they come to learn correct principles, they will see more broadly.

One must never think that the way they do it in his or her agency is the only right way.

Anyway, I think this thread is beaten to death.  I will bow out now.  If anyone else wants the last word, you may have it.  If there is a desire for further dialogue, maybe someone will open a new thread?

ji20874 and Carl,

Agencies do this many different ways.  One big reason why many don’t obligate at time of award concerns  when to recognize an obligation and use of annual or expiring appropriations.  If an agency has 30 multiple awards, for example, and those contracts have potentially ten year life’s,  it’s tedious to track.  If there’s only a requirement to buy a minimum over the contract period, when does the obligation occur?

@ji20874 @formerfed

The thread is not beaten when it provides information that is not accurate which has occurred.

What your agency did or does is either not fully understood by either of you or if done as you say is patently in disagreement with OMB and GAO direction.  To support this fact and answer former's question I encourage each of you to go to the current GAO Redbook, Volumn II, Chapter 7 and read pages 7-19 through 7-25.  And then follow up with a read of the "Annual Update of the Third Edition" and refer to the same pages noted above for updates.  

You will find both Volumn II and the annual update here /legacy/reg/b85d2ee8afc2a1f7.html

As always I remain open minded so until either of you can provide qualified references that support your assertions I remain very skeptical.

From one of Carl's references:

 "Give GAO B-308969 dated 31 May 2007 (http://www.gao.gov/decisions/appro/308969.pdf) a read. It states rather unequivocally: 

"An agency must record an obligation against its appropriation at the time that it incurs a legal liability for payment from that appropriation. B-300480.2, June 6, 2003; B-300480, Apr. 9, 2003; 42 Comp. Gen. 733, 734 (1963)... " (bold added)

formerfed said:

ji20874 and Carl,

Agencies do this many different ways.  One big reason why many don’t obligate at time of award concerns  when to recognize an obligation and use of annual or expiring appropriations.  If an agency has 30 multiple awards, for example, and those contracts have potentially ten year life’s,  it’s tedious to track.  If there’s only a requirement to buy a minimum over the contract period, when does the obligation occur?

Well, let me answer formerfed's question...

Each of the 30 IDIQ contracts creates an obligation, even if the contract texts do not provide or cite funds.  These obligations should be recorded on the books of the agency,  and that may be the only place where the obligations are recorded -- this can be done as 30 recordings or a single recording.  The recordings are made against current-year funds.  If an agency has not ordered the minimum by the end of the fiscal year (if annual funds are being used), the recording on the books of the agency has to be carried over into the next fiscal year.

Task or delivery orders make purchases, and they provide or cite funds.  Until the minimums are reached, these order obligations will offset the already-recorded obligations.  After the minimums are reached, each subsequent order's new obligation will require a new recording.

Yes, it is tedious to track.  Some agency comptrollers are not willing to do that work (or don't like the errors that often come with manual ledger entries), or more likely their automated systems are inadequate, so they create rules requiring simultaneous issuance of task or delivery orders to cover the minimums.  That avoids these problems.

ji20874 said:

Well, let me answer formerfed's question...

Each of the 30 IDIQ contracts creates an obligation, even if the contract texts do not provide or cite funds.  These obligations should be recorded on the books of the agency,  and that may be the only place where the obligations are recorded -- this can be done as 30 recordings or a single recording.  The recordings are made against current-year funds.  If an agency has not ordered the minimum by the end of the fiscal year (if annual funds are being used), the recording on the books of the agency has to be carried over into the next fiscal year.

Task or delivery orders make purchases, and they provide or cite funds.  Until the minimums are reached, these order obligations will offset the already-recorded obligations.  After the minimums are reached, each subsequent order's new obligation will require a new recording.

Yes, it is tedious to track.  Some agency comptrollers are not willing to do that work (or don't like the errors that often come with manual ledger entries), or more likely their automated systems are inadequate, so they create rules requiring simultaneous issuance of task or delivery orders to cover the minimums.  That avoids these problems.

Ji20874,

My question was rhetorical and I didn’t make that clear  But you’re exactly right.  That’s the best way to do it.  Sometimes many CS and COs are unaware that happens in the finance and comptroller offices - a financial obligation for the government occurs and it must be recorded.

Jamaal Valentine said:

From one of Carl's references:

 "Give GAO B-308969 dated 31 May 2007 (http://www.gao.gov/decisions/appro/308969.pdf) a read. It states rather unequivocally: 

"An agency must record an obligation against its appropriation at the time that it incurs a legal liability for payment from that appropriation. B-300480.2, June 6, 2003; B-300480, Apr. 9, 2003; 42 Comp. Gen. 733, 734 (1963)... " (bold added)

Jamaal and Carl,

We’re not saying an obligation isn’t recorded at time of award.  Financial managers must recognize all obligations and these are included by CFOs in their annual finance reports.  I think the confusion here is the obligation doesn’t have to be a specific contract modification or task/delivery order at time of award.  However a modification or order needs issues at time the payment is contractually recognized

Deleted for restatement

@formerfed

You said this "One big reason why many don’t obligate at time of award" now you say this "We’re not saying an obligation isn’t recorded at time of award." 

OMB defines an obligation as this -

"Obligation A definite commitment that creates a legal liability of the government for the payment of goods and services ordered or received, or a legal duty on the part of the United States that could mature into a legal liability by virtue of actions on the part of the other party beyond the control of the United States. Payment may be made immediately or in the future. An agency incurs an obligation, for example, when it places an order, signs a contract, awards a grant, purchases a service, or takes other actions that require the government to make payments to the public or from one government account to another. The standards for the proper reporting of obligations are found in section 1501(a) of title 31 of the United States Code. See also OMB Circular No. A-11."

 ji20874 has said this repeatedly “Recording need not be the same as funding”

So I say once again your sloppy and messy use of terms is at best confusing and at the worst not accurate.  I would also offer that you have yet to provided one reference to show that the “obligation doesn’t have to be a specific contract modification or task/delivery order at time of award.”  If you read the GAO Redbook in the area that I referenced it specifically states at page 7-21 and then page 7-23 ( I have changed the emphasis GAO put in these quotes to emphasize my position but I have not changed the quotes from the Redbook otherwise.”) the following– 

“What does all this signify from the perspective of obligating appropriations? As we noted at the outset, the obligational impact of a variable quantity contract depends on exactly what the government has bound itself to do. A fairly simple generalization can be deduced from the decisions: In a variable quantity contract (requirements or indefinite quantity), any required minimum purchase must be obligated when the contract is executed; subsequent obligations occur as work orders or delivery orders are placed, and are chargeable to the fiscal year in which the order is placed. B-302358, Dec. 27, 2004.”

“As noted previously, where the precise amount of the government’s liability is defined at the time the government enters into the contract that is the amount to be recorded.”  

And GAO then reinforces its position in the Annual Update with the following –

"Page 7-21 – Replace first full paragraph with the following:

What does all this signify from the perspective of obligating appropriations? As we noted at the outset, the obligational impact of a variable quantity contract depends on exactly what the government has bound itself to do. A fairly simple generalization can be deduced from the decisions: In a variable quantity contract (requirements or indefinite-quantity), any required minimum purchase must be obligated when the contract is executed; subsequent obligations occur as work orders or delivery orders are placed, and are chargeable to the fiscal year in which the order is placed. B-308969, May 31, 2007 (agency should have obligated the $1 million required minimum purchase under an IDIQ contract against the appropriation for the fiscal year in which the contract was executed). See also B-302358, Dec. 27, 2004. Of course, the bona fide _needs rule applies both at the time the agency enters into the contract (_i.e., the agency must have a bona fide need for the guaranteed minimum in the IDIQ contract) and when the agency subsequently places task or work orders. B-318046, July 7, 2009. (For more on the bona fide needs rule, see Chapter 5, section B.)"

And

“Page 7-23 – Replace the first full paragraph with the following:

As noted previously, where the precise amount of the government’s liability is defined at the time the government enters into the contract, then that is the amount to be recorded against funds available at the time of contract execution. For example, in the simple firm fixed-price contract, the contract price is the recordable obligation. Statutory authority to record an obligation at the time of contract execution for an amount less than the full amount of the government’s contractual obligation must be explicit. B-322160, Oct. 3, 2011; B-195260, July 11, 1979. For example, the Securities and Exchange Commission (SEC), using no-year appropriations, entered into a multiyear lease for real property. Without authority otherwise, SEC was required to record an obligation at the time it signed the lease for the government’s total liability under the terms of the lease. B-322160. When an agency uses the Federal Acquisition Streamlining Act or other similar authority, that authority may permit the agency to obligate its appropriations differently. We discuss the Federal Acquisition Streamlining Act and other examples of multiyear contracting authorities in section B.9 of Chapter 5.”__.

And finally while I am at it**, “contingent liability”?**  Really? Before you post please read all the references I have provided so that you can be accurate, not sloppy and not messy!   This is the GAO definition of the term (emphasis added) -

“Contingent Liability An existing condition, situation, or set of circumstances that poses the possibility of a loss to an agency that will ultimately be resolved when one or more events occur or fail to occur. Contingent liabilities may lead to outlays. Contingent liabilities may arise, for example, with respect to unadjudicated claims, assessments, loan guarantee programs, and federal insurance programs. Contingent liabilities are normally not covered by budget authority in advance. However, credit reform changed the normal budgetary treatment of loans and loan guarantees by establishing that for most programs, loan guarantee commitments cannot be made unless Congress has made appropriations of budget authority to cover the credit subsidy cost in advance in annual appropriations acts. (See also Credit Subsidy Cost under Federal Credit; Liability.) " 

When you find appropriation statute that allows the many agencies to do as you suggest I would be very interested in seeing it.  Until then please be careful, your choice of wording creates confusion in my view.

C Culham said:

IDIQ Award - An obligation was recorded on the books in the amount of the minimum.  A fund citation was needed to do so and was required or the contract was returned to acquistion.

Carl, was the fund citation required to be in the IDIQ contract in order for it to be recorded?

ji20874 said:

My current agency and the one I worked for before this (both cabinet departments) allow for indefinite-delivery contract awards without funds citations in the contracts and without simultaneous task or delivery orders -- remember, this is legal and honorable, and recordings are made on the books of the agency even though the funds citations are not printed in the contracts.

There you have it. The logical fallacy known as the appeal to common practice. Not only does ji base his conclusion on past practice, but he concludes that the practice is both legal and honorable based on past practice.

It's remarkable how ji continues to argue without presenting a shred of evidence to support his claims. Not a shred. It's a nonstop cycle of assertion followed by insistence.

Retreadfed said:

Carl, was the fund citation required to be in the IDIQ contract in order for it to be recorded?

Yes.   With the add on that the IDIQ fund citation might be and was in many cases completely different than the fund citations that appeared on T/D orders.

And I would like to invite you, if you have not already done so, to read the WIFCON discussion I referenced.  Where fund citation is to be was discussed in that thread.   More specifically I am not going to get into a debate like that of - "What authority do I show in block such and such of modification" - to do so avoids the specific that both former and ji are promoting the use of wording and processes that are directly in conflict with the direction of OMB and GAO - period.  Until they provide reference that what they are stating is allowable and done my many I am not convinced and playing games about where a fund citation is to be placed is foolish, has already been addressed in the references I have provided, and makes the whole discussion more messy and sloppy.

Carl, I have read what you referenced in the Red Book.  I also have read the coverage of this topic in the DoD FMR (Vol. 3 Ch. 8) and I can find no requirement that a fund citation must be included in an IDIQ contract  when the contract is awarded.  Can you point us to what you believe requires this?

Retreadfed said:

Carl, I have read what you referenced in the Red Book.  I also have read the coverage of this topic in the DoD FMR (Vol. 3 Ch. 8) and I can find no requirement that a fund citation must be included in an IDIQ contract  when the contract is awarded.  Can you point us to what you believe requires this?

"FAR 4.1005-1

(a) Except as provided in 4.1005-2, each line item or subline item shall include in the schedule (described at 12.303(b)(4), 14.201-2, or 15.204-2, or in a comparable section of the procurement instrument), at a minimum, the following information as separate, distinct data elements:

(1) Line item or subline item number established in accordance with agency procedures.

(2) Description of what is being purchased.

(3) Product or Service Code (PSC).

(4) Accounting classification citation.

(i) Line items or deliverable subline items. If multiple accounting classifications for a single deliverable apply, include the dollar amount for each accounting classification in the schedule (or a comparable section of the procurement instrument).

(ii) Informational subline items. An accounting classification citation is not required. (See 4.1004)"

While 4.1005-2 provides exceptions to IDIQ's it does not except the accounting classification citation.

Additionally consider say Block 25 of the SF 1449.   Now before you go on and on about that the 1449 does require the Accounting and Appropriation Data tell me where there is any instruction that all the blocks prior to block 25 need to filled out.   Its common sense based on OMB and GAO regulation and FAR 4.1005-1(a)(4) that a fund citation must be included in an IDIQ contract - somewhere. 

Finally go here https://www.gao.gov/products/B-318046

Now a request for you.  What is the reference that says that you do not have to identify accounting and appropriation data for an IDIQ minimum.   Better yet please direct me to a reference that says a CO can award a IDIQ and not have an appropriation, apportionment, commitment and a recorded obligation for the minimum.   I will be waiting.

Otherwise for me this specific segment of the discussion is done until you provide me a reference.

PS - As supported by many instances in WIFCON I am always open and will change my position on a topic when provided with adequate and appropriate reference.   In the case of this thread a few have made statements that are in conflict with definitive references not only regarding regulation but their own statements.  And not one has said Oh I get it instead they just disappear!   Frustrating and not what I do was a professional.  I will be waiting.

Retreadfed,

You might want to point Carl to FAR 4.1005-2(a)(1), where we read the following as an exception to the rule Carl quoted:

• “The following required data elements are not known at time of issuance of an indefinite-delivery contract, but shall be provided in each order at the time of issuance: a_ccounting classification_, delivery date and destination, or period and place of performance.” (Emphasis added.)

FAR 4.1005-2(a)(1) applies to all indefinite-delivery contracts (including IDIQ contracts).  4.1005-2(a)(2) applies only to IDIQ and requirements contracts.

There it is, in black and white, for all contracting professionals to see.

ji20874 said:

Retreadfed,

You might want to point Carl to FAR 4.1005-2(a)(1), where we read the following as an exception to the rule Carl quoted:

• “The following required data elements are not known at time of issuance of an indefinite-delivery contract, but shall be provided in each order at the time of issuance: a_ccounting classification_, delivery date and destination, or period and place of performance.” (Emphasis added.)

FAR 4.1005-2(a)(1) applies to all indefinite-delivery contracts (including IDIQ contracts).  4.1005-2(a)(2) applies only to IDIQ and requirements contracts.

There it is, in black and white, for all contracting professionals to see.

Thanks ji now you and Retreadfed go chew on this.....................

"DOD Financial Management Regulation, Vol. 3, Ch. 8080404. Open-End Contracts and Option Agreements. When the quantity required

under a contract or agreement is indefinite and is determined by subsequent orders, an order not

requiring acceptance by the contractor shall be recorded as an obligation in the amount of the

price stated in the order upon placement. When the contract or agreement requires acceptance of

the order by the contractor, the amount of the order must be recorded as an obligation upon

acceptance. In the case of indefinite quantity contracts for supplies or services that specify

delivery of minimum quantities during a given period, an obligation must be recorded upon

execution of the contract for the cost of the minimum quantity specified."

Now tell me again how does finance know the accounting information (aka appropriation) that must be recorded?

Can we get a recap? Is the question whether or not IDIQ minimum guarantees need to be 'funded'?

Also, are we talking DoD contracts or federal contracts in general?

C Culham said:

Now tell me again how does finance know the accounting information (aka appropriation) that must be recorded?

Well, they don’t have to get it from the contract, because the contracting officer is not required to include it in the contract (see FAR 4.1005-2(a)(1)).  Let’s not move the goal posts.

Don’t you agree that the contracting officer (at the level of federal-wide regulation) is not required to include the accounting citation in an indefinite delivery contract?  You asked for a citation, and now you have it:  FAR 4.1005-2(a)(1).  DoD might supplement the rules for DoD contracting officers, but we expressly are not discussing DoD.

Jamaal,

My opinion:  If an indefinite delivery contract creates a minimum purchase obligation, then that obligation must be recorded on the books of the agency, amenable to the recording statute.  However, it is not necessary to include an accounting citation in the indefinite delivery contract itself, amenable to FAR 4.1005-2(a)(1).  This is federal-wide policy.  However, it appears that some agencies may require including an accounting citation in the contract.

Others seem to disagree, and would impose their interpretation of their agency’s practice on all of us, notwithstanding the clear text of FAR 4.1005-2(a)(1).

ji20874 said:

Dont you agree that the contracting officer (at the level of federal-wide regulation) is not required to include the accounting citation in an indefinite delivery contract?

Yes but the agency must obligate to specific account and record. 

ji20874 said:

Each of the 30 IDIQ contracts creates an obligation, even if the contract texts do not provide or cite funds.  These obligations should be recorded on the books of the agency,  and that may be the only place where the obligations are recorded -- this can be done as 30 recordings or a single recording.

Donot agree with single recording..

Jamaal Valentine said:

Can we get a recap? Is the question whether or not IDIQ minimum guarantees need to be 'funded'?

Also, are we talking DoD contracts or federal contracts in general?

A full read you will see that ji and others brought DoD contracts ("move the goal posts") to the table (example - "Air Force").  .

Obligated and recorded.  I will let others still play with "funded".

It seems that ji's definition of "funded" means that the contract document has an accounting classification citation. His reference FAR 4.1005-2(a)(1) proves his claim that the citation is not required on indefinite delivery contracts.

How is this relevant in answering the OP's question?

@KingWink,

Are you asking whether you can create an obligation for the minimum before you have funding for the minimum?

C Culham said:

ji20874 said:

Dont you agree that the contracting officer (at the level of federal-wide regulation) is not required to include the accounting citation in an indefinite delivery contract?

Yes but the agency must obligate to specific account and record.

Didya View All Over Again:

/legacy/reg/b731425f144bce95.html

C Culham said:

Yes but the agency must obligate to specific account and record.

That has been my point and I believe it is ji's.  An obligation is not created by a fund cite in a contract.  Instead, a binding contract creates the obligation that needs to be recorded.  As for how  finance is to know against which appropriation an obligation is to be recorded, in my experience in DoD, a Procurement Request is submitted to finance who gives contracting a fund cite and enters a commitment for the estimated value of the contract.  When a contract is created, it is sent to finance referencing the PR and finance records the obligation.  In other words, when the contract is awarded, the commitment is converted into a recorded obligation.  Of course, there can be other ways that this is done.

Quote

19 hours ago, C Culham said:

Yes but the agency must obligate to specific account and record.

Flash back to VE nearly 20 years, not 20 hours, ago:

Quote

Q. "How can I obligate the minimum at the same time as contract award? Fair opportunity to compete and all..."

A. There is a lot of confusion over the concept of "obligate" in government contracting. An obligation is made when a CO enters into a legally binding agreement, i.e., a contract. What many 1102s call "obligating" is actually the act of recording the obligation by citing the applicable accounting data on the contract document and sending a copy to the agency's finance office. What the GAO requires is that agencies record an obligation at the time that it is made. At the time of award of an IDIQ contract the CO obligates the government in the amount of the minimum quantity. In order to obligate the minimum amount at the time of award, but before issuance of the first delivery or task order, you write down the appropriate fund citation and amount on each contract award document (e.g., SF33, blocks 20 and 21) and distribute a copy the the cognizant finance office. Later, when you issue the first delivery or task order, you refer to the amount of the minimum recorded on the original award document and you record the obligation of any additional amounts that you need to cover the total amount of the order.

Some agencies require COs to issue an order to cover the minimum simultaneous with contract award. That is not necessary.

Q. "Vern's comment: 'U.S. General Accounting Office requires agencies to obligate funds for the minimum quantity at the time of contract award.' Why would the FAR not also require this???"

A. I don't know why the FAR does not expressly require agencies to record the obligation of the minimum quantity at the time of contract award.

napolik said:

Q. "Vern's comment: 'U.S. General Accounting Office requires agencies to obligate funds for the minimum quantity at the time of contract award.' Why would the FAR not also require this???"

A. I don't know why the FAR does not expressly require agencies to record the obligation of the minimum quantity at the time of contract award.

FAR does require it (the clear requirement- and exception to citing the accounting classification is for data elements in line items and subline items).

But let's say FAR doesn't expressly convey the obligation of funds recording requirements...maybe its because recording is a comptroller function and comptrollers have their own book(s) of rules. Also, FAR includes a provision that contracting officers must comply with these other rules:

"no contract shall be entered into unless the contracting officer ensures that all requirements of law [statute or case law], executive orders, regulations, and all other applicable procedures, including clearances and approvals, have been met."

Well I have learned from this discussion and I concluded on some opinion as well.

I have learned that the current wording of FAR subpart 4.10 did not come into being until January 13, 2017.  (Ref. FR Vol. 82, No. 9 1/13/17 Page 4709).  Prior to that FAR subpart 4.10 was one sentence in length.  And it stated -" 4.1001 Policy. Contracts may identify the items or services to be acquired as separately identified line items. Contract line items should provide unit prices or lump sum prices for separately identifiable contract deliverables, and associated delivery schedules or performance periods. Line items may be further subdivided or stratified for administrative purposes (e.g., to provide for traceable accounting classification citations)."

@napolik I now wonder if historic posts from 20 years ago mean much considering when the FAR included more substance in subpart 4.10.

@Retreadfed I do not disagree with your latest post as to the process you have pointed out.

@Jamaal I would like to add a friendly amendment to your latest post that CO's are to ensure "that sufficient funds are available for obligation" as well.  I still am conflicted that CO's obligate and almost conclude they simply sign a contract.   The comptroller obligates and records.  Why?   A CO could in fact sign an unauthorized commitment (something over their warrant level) and in such a case it is not an "obligation" until ratified. 

In my humble opinion  I have come to the conclusion that the FAR Council was conflicted in implementing the final rule with regard to an exception to IDIQs for appropriation and accounting data.   Why?  In reply to respondents noting that some existing systems have the ability to trace financial data to the degree that @Retreadfed most recent post indicates the Council states that while many do some do not.  So if some do not why would they make an exception to accounting information for an IDIQ minimum?  It seems counter to their conclusion for requiring all the info for an other than IDIQ for traceability.

C Culham said:

I still am conflicted that CO's obligate and almost conclude they simply sign a contract.   The comptroller obligates and records.  Why?   A CO could in fact sign an unauthorized commitment (something over their warrant level) and in such a case it is not an "obligation" until ratified.

"Obligation A definite commitment that creates a legal liability of the government for the payment of goods and services ordered or received, or a legal duty on the part of the United States that could mature into a legal liability by virtue of actions on the part of the other party beyond the control of the United States."

COs create obligations (legal liabilities) within their delegated authority.

Jamaal Valentine said:

FAR does require it (the clear requirement- and exception to citing the accounting classification is for data elements in line items and subline items).

Please provide a cite.

@napolik I don't remember what the 'it' was or what I was getting at ... I think I was referring to the FAR's requirement that contracting officers comply with all rules (laws, regulations, procedures, etc.); and the federal and DoD rules that require agencies to record the obligation of the minimum quantity at the time of contract award. Those rules have been cited several times in this thread (e.g., case law, GAO Redbook, DoD FMR). I don't think that's a controversial statement. Is it?

On ‎6‎/‎6‎/‎2019 at 5:31 PM, Jamaal Valentine said:

I don't know why the FAR does not expressly require agencies to record the obligation of the minimum quantity at the time of contract award.

Jamaal, napolik was asking you to provide a FAR citation for the proposition that the FAR does require the recording of an obligation for the minimum quantity of an IDIQ contract at the time the contract is awarded.

The FAR does not require the recording on the books of the agency of obligations for the minimum quantity of IDIQ contracts at the time the contracts are awarded because the FAR describes the acquisition process (and recording is not an acquisition process).  Recordings are done by agency comptrollers who follow financial management rules.  Recordings are required, but not because of the FAR.  My take-aways from this thread:

• Contracting officers create obligations for minimums by executing IDIQ contracts; however, it is not necessary to include accounting citations to cover minimums in IDIQ contracts (FAR 4.1005-2(a)(1)).  [Note:  Contracting officers also distribute contracts to make sure other people (including agency comptrollers) know about them.  Distribution is supposed to occur within ten working days of execution (FAR 4.201).]
• Comptrollers record these obligations on the books of their agencies upon receipt of the executed contracts.  Historically, it has been fine for recording to occur days or weeks after contract execution (obligation creation).  [Note:  No FAR citation is provided because recording is not an acquisition process covered by the FAR -- recording is governed by the Recording Statute and financial management regulations.]

Different agencies do some of these things in different ways.  For example, in some agencies, execution and distribution may be done electronically in automated systems.  In some agencies, contracting officers are expected to include accounting citations in IDIQ contracts. In some agencies, the contracting officer's automated systems are connected to the comptroller's automated systems.  And so forth.  Every contracting officer has to follow the rules of his or her own agency.

Even with a common FAR, there is great diversity in practice across federal agencies.  I support and embrace that diversity, and appreciate the learning that can occur with robust professional dialogue.

ji20874 said:

The FAR does not require the recording on the books of the agency of obligations for the minimum quantity of IDIQ contracts at the time the contracts are awarded because the FAR describes the acquisition process (and recording is not an acquisition process).  Recordings are done by agency comptrollers who follow financial management rules.  Recordings are required, but not because of the FAR.  My take-aways from this thread:

• Contracting officers create obligations for minimums by executing IDIQ contracts; however, it is not necessary to include accounting citations to cover minimums in IDIQ contracts (FAR 4.1005-2(a)(1)).  [Note:  Contracting officers also distribute contracts to make sure other people (including agency comptrollers) know about them.  Distribution is supposed to occur within ten working days of execution (FAR 4.201).]
• Comptrollers record these obligations on the books of their agencies upon receipt of the executed contracts.  Historically, it has been fine for recording to occur days or weeks after contract execution (obligation creation).  [Note:  No FAR citation is provided because recording is not an acquisition process covered by the FAR -- recording is governed by the Recording Statute and financial management regulations.]

Different agencies do some of these things in different ways.  For example, in some agencies, execution and distribution may be done electronically in automated systems.  In some agencies, contracting officers are expected to include accounting citations in IDIQ contracts. In some agencies, the contracting officer's automated systems are connected to the comptroller's automated systems.  And so forth.  Every contracting officer has to follow the rules of his or her own agency.

Even with a common FAR, there is great diversity in practice across federal agencies.  I support and embrace that diversity, and appreciate the learning that can occur with robust professional dialogue.

Appreciate the refinement but I believe further refinement is needed.   Please consider.....

In a read of the FAR nothing conclusive can be found that appropriation and accounting data shall not be shown on the face IDIQ contract award form in the block so designated for such information.

What is concluded by a read of the FAR is that "accounting classification" need not be on the contract line item number in a contract.  That is it.  By example we have concluded that if it were a DoD contract the bolded and underlined indicator in the below need not be shown on the IDIQ contract line items -

0001

NSN 1615-00-591-6620 Shim, Aluminum Alloy,... Apbl, Rotor, Helicopter PRON A1-9-63821-M1-M1 ACRN:AA

Further FAR does provide that a CO shall ensure that there is adequate appropriation  available for obligation (FAR 1.602-2(a)) and pursuant to references outside the FAR such as the GAO Redbook that the precise amount of the minimum will be recorded as an obligation within the time that the applicable appropriation is available for obligation and recording.

Based on this further refinement I would suggest that the following wording is more precise (proposed changes bolded) –

Contracting officers create obligations for minimums by executing IDIQ contracts; however, it is not necessary to include accounting classification to cover minimums in IDIQ contracts on contract line items(FAR 4.1005-2(a)(1)).  [Note:  Contracting officers also distribute contracts to make sure other people (including agency comptrollers) know about them.  Distribution is supposed to occur within ten working days of execution (FAR 4.201).]

Sorry, Carl, I can't reach that far.

You seem willing to admit that the accounting classification to support the contract minimum isn't required on a CLIN in an IDIQ contract (FAR 4.1005-2(a)(1)), but it seems you are still insisting that it appear on the award form, such as in blocks 25 and 26 of the SF-1449.  But if the valid and honorable reason described in FAR 4.1005-2(a)(1) prevents a contracting officer from including that data on a CLIN, it will also prevent him or her from including the data on the award page.  

There are federal agencies who leave the accounting classification and amount blocks blank for IDIQ contract awards (or in the accounting classification box they might enter something like "To be cited on orders issued under this contract," and in the amount block they enter "$0.00."  The contract minimum and maximum are spelled out in the schedule (or in the addenda for commercial item contracts).

Please don't say that those agencies are breaking the law.  They aren't.  Those agency comptrollers still comply with the law to record IDIQ minimums as obligations on the books of their agencies.  They're doing it differently that you are accustomed to seeing it done, that's all. 

Can we simply agree that contracting officers should follow the procedures established by their agencies?

ji20874 said:

You seem willing to admit that the accounting classification to support the contract minimum isn't required on a CLIN in an IDIQ contract (FAR 4.1005-2(a)(1)), but it seems you are still insisting that it appear on the award form, such as in blocks 25 and 26 of the SF-1449.  But if the valid and honorable reason described in FAR 4.1005-2(a)(1) prevents a contracting officer from including that data on a CLIN, it will also prevent him or her from including the data on the award page.

(emphasis added)

Not by my read of the FAR. 

FAR subpart 4.10 applies specifically to contract line items, nothing more.  Reference 4.1000 "This subpart prescribes policies and procedures for assigning line items and subline items and their identifiers."    Your assertion of  "valid and honorable" reasoning is lost on me based on research and the clear reading of the FAR that represents a standard that is to be used by agencies for contract line items only.   To the former in a review of  IDIQ solicitations/contracts in FBO.gov they do not provide the "minimum guarantee" for an IDIQ stated and shown in the schedule as a contract line item.  Rather agencies state the minimum guarantee in some sort of statement similar to  - "The Government shall order at least the quantity of supplies or services designated in the Schedule as the "minimum", "Contract award will have a minimum guarantee of $5,000 for the life of the IDIQ contract."  As you very well know in most if not all IDIQs the Contract Line Items are a listing from which the agency may order the supplies or services at the stipulated pricing arrangements.  Ergo the statement in FAR 4.1005-2(a)(1) that accounting classification "is not known at time of issuance of an indefinite-delivery contract."   Counter to this fact it is clear from  this discussion thread that appropriation, apportionment, commitment of specific monies is known and must be known at the time of a IDIQ contract award because even you have stated that with regard to minimums "Comptrollers record these obligations on the books of their agencies upon receipt of the executed contracts."  Please correct me but I do not think even you would award an IDIQ contract without knowing that there is appropriation available for obligation.   And if you would please tell me, by example, when you have.

Further your statement in and of itself is conflicted.  First you provide that reasoning from preventing a CO from putting appropriation and accounting data on a IDIQ for the minimum is the CO's valid and honorable interpretation of FAR 4.1005-2(a)(1)), then you want me to agree that CO's should follow their agencies processes.   I mean really what is it some fumbling assertion on your part or a fact that agency policy is the best approach.

I understand and agree that you and I disagree that the appropriation and accounting should be shown on the face of a IDIQ contract award document in the appropriate block.  I never said leaving it off was "breaking the law" and I implore you to not imply or say that I did.   I will leave it at that.  

It may or may not be agency policy either way but I disagree with your appeal to "valid and honorable reason" to leaving it off as such an assertion is not true to FAR conventions.

This discussion has gone on long enough. PepeTheFrog needs to clear something up for those of you who don't understand what's going on. 

If you need to justify your possibly incorrect opinion, simply use the phrase "valid and honorable."

That is an official, definitive source. It's the end of the line. 

What is the controversy here, people? Can you not read "valid and honorable"? 

In the future, if your possibly incorrect opinion is demolished by logic, reality, law, regulation, court case, or written policy document, you simply pull out the trump card: valid and honorable. Do not bother to change your opinion or acknowledge that your opinion is incorrect or improper. Under no circumstances should you admit you were wrong or have learned something. That would be bad form.

Say it with PepeTheFrog: "valid and honorable."

These are the rules; PepeTheFrog didn't write them.

@PepeTheFrog

How do you interpret the use of bold red font?

Don Mansfield said:

How do you interpret the use of bold red font?

Font in bond and colored red is what's known as "persuasive authority," as opposed to mandatory authority. If the information is in bold, red font, you may or perhaps should follow such persuasive authority, but it is not binding.

For contrast, an example of mandatory authority or binding authority is something like "valid and honorable." There is no choice there, folks. No choice!

C Culham said:

I understand and agree that you and I disagree that the appropriation and accounting should be shown on the face of a IDIQ contract award document in the appropriate block.

Carl, I don't think the question is whether appropriation data "should" be shown on the face page of an IDIQ contract.  The question is whether it is required to be shown there.

It’s not me that makes it valid and honorable — please read FAR 4.1005-2(a)(1).  That is what makes it valid and honorable.  Those circumstances exist in some agencies, and contracting officers in those agencies don’t include an accounting citation for the minimum in IDIQ contracts.  I cannot bring myself to be so arrogant as to say that entire agencies, and all the contracting officers in those agencies, are wrong — especially when the FAR expressly says what it expressly says.

If your agency requires you to include an accounting classification (funds cite) to cover the minimum in your IDIQ contract, then you must do it — but let’s recognize that not all agencies do.  I’m all in favor of diversity and professionalism.  Each contracting officer has to follow the rules of his or her agency.

PepeTheFrog said:

In the future, if your possibly incorrect opinion is demolished by logic, reality, law, regulation, court case, or written policy document, you simply pull out the trump card: valid and honorable. Do not bother to change your opinion or acknowledge that your opinion is incorrect or improper. Under no circumstances should you admit you were wrong or have learned something. That would be bad form.

Phew! What an amazing Amphib!

Let me hop onto another quote:

Quote

Frogs seem to have some pretty powerful superhero properties. Not only are they full of amazing traits that can be explored for medicinal purposes but they also help keep pest populations under control.  Without frogs, our lives would be a lot different, and not in a good way. So show some love for our frogs. They have our best interests at heart. We should do the same for them.

http://amphibianrescue.org/2012/12/06/superhero-qualities-in-frogs/

ji20874 said:

I’m all in favor of diversity and professionalism.  Each contracting officer has to follow the rules of his or her agency.

Works for me...I like it!

C Culham said:

Please correct me but I do not think even you would award an IDIQ contract without knowing that there is appropriation available for obligation.   And if you would please tell me, by example, when you have.

@ji20874.......Still waiting.

Retreadfed said:

Carl, I don't think the question is whether appropriation data "should" be shown on the face page of an IDIQ contract.  The question is whether it is required to be shown there.

Yes it is!  As I suggested early on  show me what "shall" valid and honorable guidance there is to or not to complete blocks 1 through 24 of a SF 1449?  Once there then lets discuss block 25.

Thank you!

Jamaal Valentine said:

Works for me...I like it!

I agree!

This has been an interesting thread.  I found a related GAO decision looking for something else and came back here to post.  According to this decision, not only must the guaranteed minimum be obligated at time of award, it must reflect an actual bond fife need of the agency in the current fiscal year.  So I was wrong when I said all it took was the finance office to just record an obligation.  The obligation must be for a current and actual need which would include detailed accounting data.

https://www.gao.gov/assets/400/392952.pdf

My error and thanks everyone for setting me straight.

C Culham said:

Yes it is!  As I suggested early on  show me what "shall" valid and honorable guidance there is to or not to complete blocks 1 through 24 of a SF 1449?  Once there then lets discuss block 25.

Carl, you are avoiding the issue.  If you contend that a fund citation must be included on the face page of an IDIQ contract, you must have some regulatory or statutory authority to support that contention.  All that I am asking is what is the authority that requires this?  I have been doing this for over 45 years, mostly with DoD, and do not recall ever having seen a fund citation on an IDIQ contract.  Has DoD been doing this wrong for all these years?  If so, based on what regulation or statute?

Retreaded,

I noticed this DoD publication of year end awards.  It looks like all the awarded IDIQ contracts obligate funds the way you do - nothing on the base contract and funding via subsequent orders.

https://dod.defense.gov/News/Contracts/Contract-View/Article/1639534/

Formerfed, a slight correction:  funds are obligated with a companion recording of the obligation for the minimum quantity.  However, this is done as an accounting transaction without a funds citation on the contract document.

Retreadfed, right that makes fiscal sense to cover everything.

Retreadfed said:

Carl, you are avoiding the issue.  If you contend that a fund citation must be included on the face page of an IDIQ contract, you must have some regulatory or statutory authority to support that contention.  All that I am asking is what is the authority that requires this?  I have been doing this for over 45 years, mostly with DoD, and do not recall ever having seen a fund citation on an IDIQ contract.  Has DoD been doing this wrong for all these years?  If so, based on what regulation or statute?

@Retreadfed   I am going to make this quick.   Please refer my post of June 5.   I am done with this specific debate with regard to the appropriation and accounting information on the face of the form.  

The fact remains that the appropriation and accounting data for an IDIQ must be known and available for obligation and recording.  Agencies have all ways of making it happen by either default or specific policy but the one fact remains an IDIQ minimum when obligated must be recorded.  There are work a-rounds, electronic systems, stubby pencil, you name it but it is done.  And for me it makes all the sense in the world under FAR conventions that the fund(s) used should be placed on the face of the IDIQ award unless some work around like awarding an immediate task order is used to accomplish the minimum.  Sensible under FAR conventions just like an agency putting their name in the "Issued Block" absent some regulatory or statutory authority.  It should be done. 

PS - Here is a DoD policy - authoritative or not you decide - but they got it right once!   

SOLICITATION/CONTRACT/ORDER FOR COMMERCIAL ITEMS https://www.acq.osd.mil/dpap/ccap/cc/jcchb/Files/.../SF 1449 instructions.docx CachedWhen Preparing the SF-1449 (Solicitation/Contract/Order for Commercial Items) the Contracting Officer will complete blocks 1- 30 with the exception of blocks 12, 17, 23, 24, and 30. Enter the Purchase Requisition Number (This number is usually assigned by the requestor and found on the purchase request.)

Again I am done with the face of the award form for an IDIQ, I hope you are too.

Carl, instructions for completing a 1449 form isn’t authoritative.  If you want a good way of seeing how the entire government deals with IDIQ obligations, scan FPDS.  I quickly looked through many pages of listing and didn’t see any with money obligated on the basic award.

formerfed said:

Carl, instructions for completing a 1449 form isn’t authoritative.  If you want a good way of seeing how the entire government deals with IDIQ obligations, scan FPDS.  I quickly looked through many pages of listing and didn’t see any with money obligated on the basic award.

Good Lord!  I have a new appreciation for everyone.   I wish you would all think and read before you leap!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

I have not been hands on for something like 12 years after a 40 year career but I know this, your assertion to support a conclusion is out in left field.   Wanna try valid and honorable next?

The Federal Service Desk found here - https://www.fsd.gov/fsd-gov/answer.do?sysparm_kbid=ba5f91fb6f61a10003be658fae3ee4e0&sysparm_search=

(Emphasis added - I wish I knew how to use red bold font)

Answer :

FPDS-NG does not contain the following data elements. Contracting officers cannot put this information in FPDS-NG. Most of this data resides at the individual contracting office.

• Subcontracting data from either the government or the prime contractors with whom we do business. The government does have a method to collect this data at www.esrs.gov. The two data sources work together.
• Contract funding data outside of estimated totals and funds obligated on an action.
• Contract accounting data.
• Contract line item data is not in FPDS-NG. This includes specific information about the CLIN. There is no NAICS information at the CLIN level, no CLIN description, no CLIN funding data, and no appropriation data at the CLIN level.
• No administration details including contracting officer’s technical representative names, wage determinations data, and details about the services via the contract number.

And formerfed please remember that it seems that most if not all, including myself, have agreed agency direction, absent direction otherwise, is authoritative. 

Definition of authoritative (https://www.merriam-webster.com/dictionary/authoritative)

1 : having, marked by, or proceeding from authority

Until you try again!!!!!!!

Carl, you’re arguing against something I didn’t say.  What I said FPDS showed is all of the IDIQ contracts I scanned had no dollars obligated with the basic contract.  The money showed up on subsequent orders.  I know FPDS doesn’t show accounting and appropriation data but there’s no obligation with the contracts for the guaranteed minimum.

Accounting and appropriation data by itself without dollar amounts is meaningless because what does that do as far as obligation with showing the amount obligated?

I think this subject has been beaten to death.  I’m out and I learned something new too.

C Culham said:

I wish I knew how to use red bold font

On my laptop screen (but not on my mobile screen), there is a row of editing buttons at the top of the text input box.  It starts--

• B     I     U ...

The next-to-last button (before "Size") has a Capital A, underlined, with a little down arrow the top-right corner.  That is where you can get different colors for text.

formerfed said:

Carl, you’re arguing against something I didn’t say.  What I said FPDS showed is all of the IDIQ contracts I scanned had no dollars obligated with the basic contract.  The money showed up on subsequent orders.  I know FPDS doesn’t show accounting and appropriation data but there’s no obligation with the contracts for the guaranteed minimum.

AAccounting and appropriation data by itself without dollar amounts is meaningless because what does that do as far as obligation with showing the amount obligated?

Nice try.  Providing FPDS as a example is hollow.   I think neither you or I can help it if some one, or some ill designed system does not show the minimum as an obligation of an IDIQ.   Further it adds no substance to the crux of the discussion. 

For jollies here you go...........

IDIQs are reportable in FPDS.  (IDV)  https://www.fpds.gov/help/Reportable_Nonreportable_Contract_Actions.htm

IDIQs have a minimum obligation that is to be recorded.

IDIQs like any contract is to have their "obligation reported". (FAR 4.606)  And just in case if someone wants to bring up DoD then go here - http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/dfars/PGI 204_6.htm#TopOfPage 

ACTION OBLIGATION (Data Dictionary Element 3C)

This data element is required for all Awards and Modifications for both Civilian Agencies and DoD. It is not required for a Change or Delete/Void. Enter the net amount of funds (in dollars and cents) obligated or deobligated by this transaction. If the net amount is zero, enter zero. If the net amount is a deobligation, enter a minus sign at the beginning of the amount. See Data Dictionary Element 3C Use Case for appropriate data entry requirements.

Validation Rule 3C can be found at the following location: https://www.fpds.gov/downloads/FPDS-DES-SDD-validation_rules-DES.doc#_Toc204158310 

FPDS makes no exception to the validation rules for obligation amount for IDV. (Ref - FPDS Validation Document Competition)

3C       Dollars Obligated

Serial Number

Element/ Characteristics

Rule

Service Version

1

Format

Dollars Obligated must be currency - US Dollars.

1.0+

2

Award Type

The "Action Obligation" must be greater than or equal to $0.00.

1.0+

3

Reason for Modification

The "Action Obligation" must be less than or equal to $0.00 when the "Reason for Modification" is "Terminate for Default."

1.0+

4

Current Contract Value

The sum of Dollars Obligated for all transactions with the same PIID* must be less than or equal to the sum of Current Contract Value for the same transactions.

1.0+

5

PIID

If Dollars Obligated is less than $0.00, then the total of all dollars obligated for the same PIID* must be greater than the amount for this transaction.

1.0+

However FPDS allows it to be optional on the basis of an agency who uses a TO/DO to accomplish the minimum at award will not record the minimum for the IDIQ but as an amount (even above the minimum) for the TO/DO.  See page 225 of "GSA Federal Procurement Data System-Next Generation (FPDS-NG) Data Element Dictionary"   https://www.fpds.gov/downloads/Version_1.4_specs/FPDSNG_DataDictionary_V1.4.pdf (specific matrix not quoted here)

Try again!

On ‎6‎/‎1‎/‎2019 at 6:20 PM, ji20874 said:

Well, you might not be able to figure it out, but the rest of our readers can.

Not this reader.  My opinion is that you are making artificial distinctions between "obligating" (or is it "funding"?) and "recording" (or is it "obligating"), based on a process time lag that may be milliseconds or...never...

Are you suggesting that people are making awards without fund cites?

One has to appreciate the difference between creating an obligation and recording that obligation.  They are different — one happens in a contract, the other happens in the books of the agency.  Once one understands the difference, he or she will be able to figure it out.

Yes, it is very possible to create an obligation (such as by awarding an indefinite-delivery contract) and then to record that obligation without putting a funds cite in the contract — it happens all the time, legally and honorably.