Using previous FY funds to fund option year that begins in the next fiscal year

I have my own thoughts based on general principles (no), but ask your comptroller and attorney.  That way, you aren't the bad guy in the story and you rely on expert advice from people on whom you should be able to rely for expert advice.  Who knows, there may be some exception that applies in your agency.

The option year start date of 1 October kills the use of 2019 funding.  There’s no performance at all in FY 19

The only "lead time exception" for services seems to be related to training that is required in the current FY and is scheduled to start as soon as possible which happens to be in the next FY, which is not the case here.  If there are several options left you could consider bilaterally modifying the contract to shorten the current period of performance by a day or two and change the POPs for all remaining options to allow you to exercise with end-of-FY funds for the remainder of the contract. Otherwise if you are ever delayed in getting funding the first day of a new FY and can't exercise the option the contract will end.

On ‎8‎/‎2‎/‎2019 at 6:00 PM, Tigerlady77 said:

I just got assigned a contract for severable services in which I am to exercise option year 1. The base year ends on 30 September 2019 and option year 1 begins on 1 October 2019. The customer provided a PR&C with FY19 O&M funding and wants to fund the option year with this money. Even though the funding will be obligated prior to the fiscal year (as the option has to be exercised prior to contract expiration), the funding that will be used for services will not begin until the next fiscal year. This does not seem right to me and I feel it does not meet the Bona Fide Needs  rule, which requires appropriated funds be used only for goods and services for which a need arises during the period of that appropriation’s availability for obligation, as the services do NOT cross fiscal years. To me, the option year is a need of FY20's need and not FY19's need so I feel like this would be a violation of the Bona Fide Needs rule.

Question:  Can an option year on a severable services contract that begins and ends in the same fiscal year (in this case, 1 October 2019 thru 30 September 2020) be considered a "bona fide need" for the previous FY (in this case, FY19) since we are exercising the option in FY19 and therefore could use FY19 appropriated funding for the FY20 period of performance?

SEE GAO opinion B-317636