Informational Guidance |
IG 5332
Contract Financing
July 2004
IG5332 Introduction
This guidance document provides recommended actions for certain contract financing actions.
IG5332.7 Contract Funding
(1) The following guidance may be used by MAJCOM Contracting Staffs as an example to establish MAJCOM-wide policies regarding funding of purchase requisitions.
(2) Base contracting activities should not issue a solicitation for supplies or services without an allotment citation of funds availability unless the purchase request is for:
(a) A requirement chargeable to the Air Force Stock Fund and the local primary stock fund manager (of a stock fund division that is exempt from apportionment control) furnishes the following signed certificate to the contracting office:
“I certify that all purchase requests for [insert stock fund item names] stock fund items for fiscal year [insert fiscal year] are provided for in the approved [insertname] operating program for fiscal year [insert fiscal year]. The proper accounting classification to be cited for the entire fiscal year is [insert classification].”
(b) An industrial fund requirement and the accounting agent has furnished an annual certificate substantially the same as in paragraph (1) above, except that the accounting agent enters the fund cite on each purchase request;
(c) A contract conditioned upon the availability of funds as authorized in FAR 32.703-2;
(d) A requirements type contract is to be established which does not require a firm funded order at time of contract execution;
(e) Information needed for planning purposes pursuant to FAR 15.201, or
(f) Requirements under paragraphs (3) or (4) below.
(3) When a purchase request is for one of the requirements listed in (3)(a) through (3)(d), the base contracting activity may issue a solicitation, receive and open offers, and prepare final award documents (including clearance, if required). However, the contract should not be signed by the contracting officer; delivered to the contractor; nor the contractor be notified that it has been awarded a contract until funds have been certified by the accountable AFO. Since contract award is normally not made subject to the availability of funds, the procedure and clause prescribed in FAR 32.703-2 (a) shouldn’t normally be used. If additive or deductive items are included in the bid schedule, the contracting officer should determine the amount of available funds before bid opening:
(a) A project in connection with family housing and/or mobile home parks, upon direction by AF/CE;
(b) Construction to be commenced in the next fiscal year, if the approving authority certifies that the requirement has a high enough priority to ensure that it will not be canceled when the next fiscal year funds become available. Current fiscal year funds may be used if they become available before the end of the fiscal year and the contract can be obligated as required by Interim Guidance on Accounting for Obligations;
(c) A military construction program (MCP) project when the contracting officer receives written notification that the Air Force has responsibility for the acquisition, that the project has been approved for acquisition, and funds are available and being forwarded through channels. This exception still applies when the purchase request funding is limited to the amount of the initial Government estimate and the latest estimate, based on actual design and engineering information, exceeds the amount of the purchase request. In such cases, solicit bids or proposals before requesting additional funds; and
(d) A minor construction project (P-341 funds and commissary surcharge funds) supported by a statement that funds are being held in reserve at HQ USAF and will be made available when needed to award the contract.
(4) The MAJCOM Civil Engineer, Director of Contracting, and Comptroller may jointly agree in writing to authorize base contracting activities to issue solicitations for facility project requirements when it is anticipated that the contract will be awarded in the current fiscal year but funds are not yet available. Use of this authority may be subject to the following, as determined by each MAJCOM:
(a) MAJCOMs should carefully consider the use of this authority. It should only be used for non-complex projects for which estimated bid or proposal preparation costs are relatively low in relation to the estimated cost of the project. Also, MAJCOMs should consider imposing a limit on either the project value or the aggregate value of all projects solicited using this procedure;
(b) Projects that may be solicited under this authority include those for maintenance, repair and minor construction, facility O&M projects, and environmental restoration and compliance projects, which the MAJCOM civil engineer has reviewed, verified as a bona fide need, and determined that there is a reasonable likelihood that the project will be funded in the annual year-end program;
(c) MAJCOM Civil Engineering and Comptroller offices should identify to Contracting the projects selected to be solicited under this authority, in adequate time to permit solicitation and processing. MAJCOM Contracting, Comptroller, and Civil Engineering should establish a reasonable cut-off date for cancellation of solicitations, in order to have time to open the offers and process the contract award before the end of the fiscal year;
(d) Solicitations should not be opened until the funds certifying official either certifies that funds are available, or notifies the contracting officer that there is reasonable assurance that funds will be available after opening. If a reasonable assurance notification is received from the funds certifying official, the solicitation should be opened and processed up to the point of award. However, the contract should not be signed by the contracting officer, delivered to the contractor, nor the contractor be notified that it has been awarded a contract until funds have been certified by the accountable AFO. If funds or a “reasonable assurance” notification cannot be provided by the established cut-off date, the solicitation may be canceled before opening; and
(e) Solicitations issued under this authority should contain a notice on the cover sheet and in Section L as follows:
“Notice to Offerors: Funds are not presently available for this project. No award will be made under this solicitation until funds are available. The Government reserves the right to cancel this solicitation, either before or after the closing date.”