Presentation Transcript

1. Contingency FundingChapter 3

   Nov 11, v5
2. Learning Objectives Enabling Objectives Identify types of contingency funding Discriminate between various lines of accounting Explain the contract board review process Explain the contract ratification process Terminal Objectives Verify that a Purchase Request document is properly documented and certified
3. Funding Contingency Operations FISCAL LAW CONSTRAINTS Appropriated funds are subject to three basic fiscal constraints: Time, Purpose and Amount. “Time” control includes two major elements. First, appropriations have a definite life span. Second, appropriations normally must be used for the needs that arise during their period of availability. The general rule is that “current funds must be used for current needs.” “Purpose statute”, prohibits spending money on objects other than those for which appropriations were made. The purpose statute typically refers to the concept of “color of money”, Amount, of paramount concern is ensuring that the DoD complies with the "Anti-Deficiency Act," 31 USC § 1341(a), which prohibits obligating or spending money before it is appropriated or in amounts in excess of the amount appropriated
4. Time: Appropriations Availability
5. Time & Purpose: “Color” of Money
6. Fiscal Law Constraints Appropriation Act[Title 31, U.S. Code, Sec 1301] Requires funds to be used only for the purposes and programs for which the appropriation was made AKA “The Purpose Statute” Violations are misappropriations Anti-Deficiency Act[Title 31, U.S. Code, Sec 1341 & 1517 ] Prohibits making or authorizing an obligation in excess of the amount available Forbids obligation to pay money from the US Treasury in advance of an appropriation Requires agency to fix responsibility for violations of the Act Bona Fide Needs Rule Requires funds to be used only for needs or services in the year of the appropriations obligation period
7. Typical funds seen by a CCO O&M (1-yr money) Procurement (systems, vehicles, major equipment >$250K) Construction (MILCON) Overseas Humanitarian, Disaster, and Civic Aid (OHDACA) Non Appropriated Funds (NAF) Official Representation Funds (ORF) Combatant Commander Initiative Fund (CCIF) Foreign Disaster Assistance (FDA) Commanders Emergency Response Program (CERP) Stafford Disaster Relief & Emergency Assistance Act (FEMA)
8. O&M Sub-Appropriations Emergency and Extraordinary Expenses Funds to pay for any emergency or extraordinary expense which cannot be anticipated or classified Official Representation Funds Used to maintain the standing and prestige of the US by extending courtesies to guests of the DoD CINC Initiative Funds Fund contingencies, selected operations, special training, humanitarian assistance, and civic assistance Humanitarian and Civic Assistance Promotes security interests of U.S. and country in which activities are carried out . Not to be used for military of Para-Military activities
9. MILCON Obligation Availability of 5 Years Unspecified Minor Construction Projects (UMMC) $750K to $3M per project Most common Specified Military Construction (MILCON) Projects exceeding $3M Requires Congressional approval
10. Construction Funding Con’t
11. Purchase Request Actions always initiated by “PR”
12. MIPR – DD Form 448 DD Form 448, Military Interdepartmental Purchase Request (MIPR) Contract Offloading: Process whereby an agency requests supplies or services via contract action from another agency Two Kinds: CAT I Contracting organization uses their own funds on contractual instrument CAT II Contracting organization directly cites requesting unit’s funds on the contractual instrument Each order must be supported by a Economy Act Determination and Finding (D&F) demonstrating best interest of the government Comptroller functionally responsible, coordinates with requesting activity
13. Discussion DD 448 MIPR Example
14. Preparing a PR What should the PR describe? Who should write the PR? Who should be available for questions? What if there are problems with the PR? Who writes the SOW/ PWS? Who approves the PR?
15. How to read a fund cite Accounting classification codes (also referred to as a fund cites) are required on all purchase requests Example 571340030867A22310100159290503000ESP8Z Position #: 1-2 3-4 5 6-9 ACRN Agency FY Appropriation 57-1-3400-30867A22310100159290503000ESP8Z 57 = USAF 1 = FY 2001 or 2011 3400 = O&M Note: ACRN is not yet included
16. LOA Funding Citations ACRN Accounting Classification Reference Number (#1-2) Alphabetic; serves as reference identifier to line of accounting A second line of accounting begins AB Agency (#3-4): 17 Dept of the Navy (includes USMC) 21 Dept of the Army 57 Dept of the Air Force 97 Dept of Defense Fiscal Year (FY) denoted with one digit (#5): FY11 = 1 Appropriation (#6-9): Specific to service AA571340030867A22310100159290503000ESP8Z
17. ARMY NAVY/MC AIR FORCE OSD Military Personnel 2010 1453/1105 3500 N/A Reserve Personnel 2070 1405/1108 3700 N/A National Guard Personnel 2060 N/A N/A N/A O&M 2020 1804/1106 3400 0100 O&M, Reserve 2080 1806/1107 3740 N/A O&M, National Guard 2065 N/A N/A N/A O&M, Family Housing 7025 7035 7045 N/A Procurement (Aircraft) 2031 1506 3010 N/A Procurement (Missiles) 2032 N/A 3020 N/A Procurement (Weapons & Tracked Vehicles) 2033 1507 N/A N/A Procurement (Ammunition) 2034 N/A N/A N/A Shipbuilding & Conversion N/A 1611 N/A N/A Other Procurement 2035 1810/1109 3080 0300 Research, Development, Test & Evaluation (RDT&E) 2040 1319 3600 0400 Military Construction 2050 1205 3300 Family Housing Construction 7020 7030 7040 Stock Fund *(Also known as Navy Work Capital Fund) *4930 Appropriations
18. Test Yourself AA2102020… ACRN = First (or only) LOA 21 = Department of the Army 0 = FY10 2020 = Operations and Maintenance
19. Test Yourself Second LOA on same document Department of the Navy FY 2010 Military Construction AB1701205
20. What is a JARB? In general, each requirement will require prioritization from the commanders in the field The JARB's main role is to approve and prioritize JFC-designated, high-value and/or high-visibility requirements and determine the proper source of support for these requirements. Once the PR is approved by the Service process, the requirement will be sent to the JARB
21. State Department Arms Export Control Act Permits DoD to provide defense articles andservices to foreign countries to enhance self defense. Foreign Assistance Act Permits the US to provide foreign assistance and military/ security assistance . Similar to AECA but allows more flexible terms.
22. Foreign Funding Options Section 607 of Foreign Assistance Act Authorizes US government to furnish commodities and services to friendly foreign countries, includes peacekeeping and disaster relief efforts on a reimbursable basis UN Section 7 of United Nations Participation Act (UNPA) Authorizes US to furnish services, facilities, or other assistance when requested by the United Nations on a reimbursable basis, unless waived by the SECSTATE (after consulting with SECDEF) Acquisition and Cross Servicing Agreement, NATO Mutual Support Act (Public Law 96-323) Provides DoD with simplified authority to acquire logistics support without resorting to AECA
23. PEPFAR Funding National HIV/AIDS Prevention Program $ millions being spent each month around the world by DoD contracting officers. Funds are unique, sent via MIPR and don’t expire. http://www.pepfar.gov
24. Practical Exercise Purchase Request Documents Training Practical ex. # 1
25. Practical Exercise Funding Contingency Operations
26. Contractor Payment Options The full spectrum of government financing should be considered to facilitate business partnerships and economic growth based on your location, to include: progress payments, payments for partial deliveries, performance based payments and commercial interim payments. Advance payments present greatest risks Factors to consider before awarding advance payments: (1) Conditions that warrant the request (e.g., lack of an established/robust banking system, unstable commercial environment, hostilities), (2) Consideration of other financing options (e.g., progress payments, partial payments), (3) Tangible risks and mitigation plan, and (4) Adequate security to protect the Government’s interest.
27. Unauthorized Commitments & Ratifications The term “unauthorized commitment” is an agreement that is nonbinding solely because the government representative who made it lacked the authority to enter into that agreement (See FAR 1.602-3). Ratification is the act of approving an unauthorized commitment by an official who has the authority to do so, for the purpose of paying for supplies or services provided to the government as a result of an unauthorized commitment (FAR 1.602-3(a)).
28. Ratification Checklist Supplies or services have been provided to and accepted by the Government, or the Government otherwise has obtained or will obtain a benefit resulting from performance of the unauthorized commitment The ratifying official has the authority to enter into a contractual commitment; The resulting contract would otherwise have been proper if made by an appropriate contracting officer; The contracting officer reviewing the unauthorized commitment determines the price to be fair and reasonable; The contracting officer recommends payment and legal counsel concurs in the recommendation, unless agency procedures expressly do not require such concurrence; Funds are available and were available at the time the unauthorized commitment was made; and The ratification is in accordance with any other limitations prescribed under agency procedures. (FAR 1.602-3(c)).
29. Practical Exercise Unauthorized Commitment
30. Work on your Group Projects