FUNDING OF CHANGE ORDERS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP09K00541R001000090019-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 11
• Document Creation Date: December 22, 2016
• Document Release Date: August 16, 2011
• Sequence Number: 19
• Publication Date: May 20, 1994
• Content Type: MEMO

Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
DErARTMENT OF THE AIR FORCE
Nuoou~-RTSas Alw roRGt MAT'tI1~E~. COMMAND
MIIGHT?PATTCIlSO/YAI8 rORCE DAtE. OM~O
20 May 94
M>rNiORANDUM FOR 5EE DISTRIBUTION
FROM: HQ AFMGJA
4225 Logistics Avenue, Suits 23
Wright-Patttrson AFB OH 45433-57b2
suB7>rCr: Fundit-g of t~aage Orders
1. There has been considerable debate and apparent confusion over the correct rule: for detrntuning
the appropriate fiscal year funding for contract modifications citing the Changes Clause. In an effort to
aea]a this matter in a tnanner which will pertuit uniform and cocrxt application by all AFMC
uquisition personnel. Mr. Ptrfilto undcrtoolc to prepare a memorandum of law on the subject. ESCJJA,
SMC/JA, AFMI~.C/JAN and AQ AFMtJJAS, as well as HQ AFMC/FM and PK, worn constilted in
this effort. There was considerable negotiation of the final language of the memorandum with
SAF/GCA and GCQ to insure that the final product would produce conaisteatly, kgagy iccunt~ i+esults
~ would have the full and uaqualifled support of SAP/GCA wad GCQ. Indood, this has brew
achieved, wad both Mr. Willson wad Mr. Janecek have per:aaally coo~rdiaated on the Baal product.
2. We do not expect this memo to be widely distributed u the clieac working kve1, wince the issues of
law arc very complex and fact intensive. I would prefer that our clieab not attempt to rely on their own
iuterpretatioa of the memo, but rather work closoly with your o}fica in resolving these A~nding issvCS.
3. At long last, this memorandum sLould provide aiI of otsr acquisition attorneys a consistent set of
grvundruies for fuadiag of modification citing the Ci~anges Clause, whicL bas bees agreed in at the
highest levels within the Air Foroe legal community and which, thet~efon, provides a needed degree of
confidence in today's environment of second-guessers. I fully carport you to actively participate with
your clients, on a case=by-case basis, in the analysis which leads up to these funding decisions.
~~~ .
JAMES G ROAN. JR.
Brigadier Genrral, USAF
Staff Judge Advocate
AaachrY-ents:
AFMCLC/JA IVlemoru~dum of
Law, 19 May 94
cc:
HQ AFMC/FM
HQ AFMC/PK
Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
 Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
_.EPARTMENT OF THE AIR IrORt~.ii
Alll 1"OIIGi MATil11iL GOMMANO LAW CtNT[R /A~LIC1
WRIOMT?PATTales.
A fbndama~tal pxYndple of appropriations law is the "bona tide need rule" that a fiscal
ytdr's (or period's) appropriation may only be obligated to mat a U'~ Hood arising
in (or in some cases arising prior to but continuing to adst ia}. the fiscal year (or psnod)
for which the appropriation was made. Principles of Federal Appropriations I.aw, 2d. ed,
GAO/0C3C-91-S, Appropriation I.aw (PrincipIas) Vol. L, at S-9. 1'hi: rWe has a statutory
basis in 31 U_S.C. Sec,. IS02(a). Also see the Antideficienoy Act, 31 U.S.C. Sec. 1341(a),
and the Adequacy ofAppropriations Act, 41 U S.C. Sec 1'1. Prindples, Vohune >: at 5-10;
AFR 170-8 (1S Jan.90), Para. 4c sad 8; and, AFIt.177-16 (30 Nov 88), Pan. 40c. While
the bona fide needs rule itself Baas universal applicnbiTity, there is no coo3cbook approach to
its use. Detoa of what constitutes a bona fide need of a fiscal year (or period)
depends largely on the facts end circumstances ofthe specific case. Principles, Vd l; at S-
10. The funding of contract modifications ~lustrates this comple~dty.
"Contract performance may rx#end over several years. During this times the contract may
be modified or amended far a variety of reasons at the instigation of either party. An
aamendmem within the general scope ofthe contract, which does not incxease the Coairact
price, remains an gbligstioat of the year in which the contract was ejcewted." Prindples.
Vol I, at 5-31, citing ~-68707 {Aug. 19, 1947). Where s modification reailts in an
increase in contract price and the appropriation which funded the or3ginal~ eontnct has
aspired, the question, from the bona iide needs perspective, is which 5scal year
appropriation should bind the costs of the modification. FrIndples, Vohutya ~ at 5-31. If
a modi0cation s the general scope of the original contract, for example, by
increasing the quantity of items to be delivec~d, the nnodification represasts taw
procurement and thus eonsdtuus a new obligation which must be flmded with
Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
 Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
appropriations current at the time the modification is made. Principles, Vol 1; st 5-31,
Citing 37 Comp. Gen. 861 (1958) and B-207433 (Sept. 16, 1983).
For modifications within the general scope of the contract which result in iacreastd costa,
the situation is snore complex. Most Government contracts contain standard provisions
which render the Government liable to make equitable adjustments in the contract price
under specified etlnditions. Whey an ulrvvard price adjushnent is necessitated is a
wbsequont year, the general approach >: to isle whether the adjustment is attributable to
"rmaa~durt Gability" ? that is, whether it arises and is enforceable under a provi,4ion is the
original contract. If so, thm a price u33justmaat, even though requested and approved in a
sub~scqucnt fiscal year, ~viI1 ge~acrally be charged against the appropriation current at the
time the rorrttact was originally executed. Principles, Vol ~ at 5-32, dung S9 Comp. Gen.
818 (1980); 23 Comp. Gen. 943 (1944); 21 Comp. Gen. 574 (1941); 18 Comp. (len 363
(1938); B-15225 (Sep. 24, 1926); B-146~8S-4.M. (Sept. 28, 1975); 8-203074 (Aug. 6,
1981); aqd B-197344 (Aug., 1980). This prindple ix occasionally referred to as the
"relation back" doctrine. E.g., 37 Comp. Cren.~861, 863 (1958). Principles, Vol ~, u 5-32.
"Tbe reasoning behind this general approach is that a'relation change order does not
live rise to a new liability, but instead, only rendersfixed and cetain the amount of the
Governrner~s pre-eaa~ing fiab~ty to sd,Nst the carmraet price. Since that liab7ity arises at
the tinge the original contract is ex, the subsequwt price adjustment is viewed as
. reflecting a bona fide need of the same year in which funds were obligated for payment of
the original contract price." Principles, Vol I, at 5 3Z, dung 23 Comp. Cleo 943, 948
(1944).
However, not all price adjustments arising from contract modifications or aauadmeAts
represent a bona Sde need of the year in which the original went was IDsde. If the
change or ame:idment exceeds the genera] :cope of the contract, oc is not made pursuant
to a pmvisioa in the original contract, thm id is not and cannot be based on any antecedent
liability. In sudr event, tlss agency may obligate ply appropriations current at the time
the modification is issued, Prindples, Vol I, at 5-33, dting 56 Comp. Can. 414 (1977) and
25 Comp. Gen. 332 (1945); accord, DOD 7220.9-Ivh Chapter 25, pars D.11. One
important qualification of the antecedent liability rote is in cost relmbur$ement contiacta
where discretionary cost increases ~.e.. increases which are not enforceable by the
contactor), tbat exceed funding ceilings established by the coruract maybe charged to
flrnds currently available when the discretionary increase is granted by the Contracting
Officer. Principles, Vot I, at 5-33, sting 61 Comp. Gen 609 (1982). The rationale for this
view is that it would be tmressonable to require the Contractia~ Officer to reserve funds is
aebicrpation of increases beyond the contract's cuing.
All of this discussion of funding of contract raodi5cations must, of course, be wper-
imposed with the most fundamental point, that is, that fiscal law does not exist in a
vacuum. Thus, the most important qualification to the Hiles discasssed above is that
whatwer exists as a generalized apptopriatioA nrlo maybe changed by the spodflc
appropriation language of the Congress.
Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
 Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
Public Law 1 Ol-S10
Publia Lsw 101-510: (1) eliminated the use ofinerged surplus authority to fund
adjustments to "M"~ account obligations incurred after S Dec 90; (2) canceled over a
3-gear period budget authority associated with obllgatioas recorded is existing "lvt"
accounts; and, (3) made expired appropriations available Lo ageaciES for s yeas to fund
upward adjustzents. and pay, recorded obligations, slier which say unobllgatcd or
obligated balaace+t veers t~caled Orae canceled, Rmds may sot be used for any Purpose.
GAOIAFIvID-93-7 (Apr,,1993~ Appeod'ar I at 13.
OA 13 Jun 1991, DOD directed activities to use current year appropriations iaste~d of tlu
applicable expired years' appropriations to flmd an contract changes, even whore the
changes.did not agaand the scope of the work of the contract. Following QAC) inquiry,
DOD rescinded its policy on 20 Apn71992, and thus returned to the pro-June 1991 status
quo. The GAa report addressing the above mentioned DOD ~rectioa provides valuable
insight into the Comptroller General's view: about use of cumnt versus expired yea:'
appropriations in funding contract modi~c~tions. In "Agcnaes' Actions to Eliminate 1VT
Accrnmts and Merged Surplus Authority,' GAO/AF1VID-93-7 (Apr., 1993), Appendix lY
at 30 and 31, the CIAO sets forth its view in some detail as follows:
'We believe that the use of aurrent year lirnds, without specific
congressional approval, for within scope contract change,! related
to rxetred np~ 'stions is improper. DOD required tha#, with
limited cxceptioas, ~ additional costs incurred as a result of
contract changes be~ftmded out of caare~ year farad: regardless of
which fiscal year's appropriation was obligated by the comract
This polieq was a marked departure from the rules for obligating
contract changes."
"DOD generally agreed with our findings and recommendation
However, DOD did not agree that it was improper t0 use cauTent
year appropriations to fund additional contract costs 3C
~~ to expired year' accau~s. As we stated in our report,
muaerous Comptroller Crenerdl dedsions discussing the rules for
tt~nding additional vests related to within scope contract changes
have bald that such costs are chargeable to the appropriation
itsitiaUy obligated by liar caatract. Although we asked DOD':
Crmeral Counsel to provide us with its legal justiScstioa for
deviating $on4 the Comptroller Gianeral's ' 'oas, none was
provided Therefore, in our opinion, DOD's use of surest year .
~llu~ds, without sped~c congressional approval, for within scope
conrtract changes related to exci aoo^ro n~adon: was improper."
(emphasis added).
Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
 Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
The problem with the DOD direction was that it called for ~ contract ~aagas peg
costs to be~ charged to fiscal .year appropdadons cun~ent when the change was made, even
those changes for which there was clear relation baelc to the acrd which the uadtarlyiag
comract sought to fulfill.
Within the Scope of~~ Contract
Aetermining what constitutes a modi5catioa beyond the gtncral scope of the original
eontrac~ (the GAO states) can be di~cult. aAOfNSIAD-89-209, B-23s114 (sapt., 1989)
at S. The Comptroller t3maal and the Courta in determining whether contract
aiodifieations are within the scope of the original contract, have adopted tha "cardinal
change" Wile. The Claims Court stated in Air-A Plane Coro~v. U.S., 408 F.Zd 1030
(1969):
"The basic etandard...is whether the modified job `aras es~ntially
the same work as the pu~ties }~~aed for when the contract wan
awarded. Plaintifl'has no risht to complain if the project it yhimatcly
constructed was essentiBTly ~,~~~e_ ss the one it contracted to
COnstruCt.' Com~ersely, thue is a cardinal change ifthe ordered
deviations 'altered the nature of the thing to be constructed.' Each
case must be analyzed oa its own facts and in light of ire aara
circumstance:, giving just consideration to the magnltud~ and
quality of tine changes ordered and their cumulative effect upon
the project as s whole."
(anphasis added)
In the acme context, the Comptroller General has concluded that a change would be
deemed to be within the scope of the original contract if it was "...essential to ttilfillmeat
of [originals contract requirements." C~AO/NSIAD-89-209, B-235114, at S.
A threshold retLrmce point in this disuusion has to be a general underatsnding of the
t~iietion of the "Changes" clause. Professor Ralph Nash, a noted authority in the $eld,
states that primary purpoae of the "Changes" clause is to assure shat the GavaYUneat has a
wlde dngree of flpn'bility during performance of a (;Fovernmmt contract and that the
contractor is adequately compensated when the Government exerdses this 8exrb~'ity. One
of the purposes served by the clause v to facilitate the suggestion of changes by the
coetractor. Aa the contractor ]mows that it w~l receive as equitable adjustraeat in the
contracs price or schedule if the change is ordered, the contractor is encouraged to
suggest such changes. The avar7ability of the changes procedure given some assurance
that the suggestion will be coruidered and acted On if It bent$ts the t3overntaeru. Nash,
Government Contract Changes (2d. ed., 1989 and Sugp, 1991) at 3-2.
According to Professor Nash, the "Changes" clause serves another purpose, which is to
provide to the tovernment procurement authority a vehicle to order additional work
Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
 Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
'within the genorak scope of the contract" without following the statutory Hiles governing
new procurlsnent. The clause in this raped greatly eimpli$es the procurement mission by
allowing additional work to be undertaken with much greater speed and efficiency. 1`Tash,
at 3-Z. This expansive view of the "Changes" clause's latitude has been the take off point
for analyzing work to be added to ejdsting contrncts for a substantial period of time (Sec,
for example, SAF/GC Metrioru~dum for Air Force ASPR Committee, Policy Member
entitled, "Changes Clause," dated 10 Juu 1974). Howevtr, competitors havo 81od protests
claiming that they were deprived of the righ# to oampete for work that was ordered under
the "Changes" clause. In this .context, the issue is whether tLa change is "within the scope
of the original compedtia~n."
Not all contract modifications which Cite the "Changes" clause are born alike. We nnut
segregate those where the bona fide need truly relates back to the underlying contractual
obligations from those which cite the "Changes" clause as procurement authority, but
where the bons Sda need for the modification of the ef'Fort relates to the appropriation of a
pirrent fiscal year. This is not a new, strange; or novel concept. The term 'scope of the
contract" has for many y~ bxn viewed differently depending upon the nature of the
inquiry. T'he most ire r~oaant acample of this is the U. S. Court of Appeals for the
' Federal Circuit decision in AYdcT Communi~ations:_Ina. v. Wiltel; T, c. 12 FPD Para. 66
(Fed. Cir., 1993), reversing the decision of the GSBCA finding the change to ba outslde
the cope of the contract. In the process, It provided guidance on the reasoning to be
foIlowed in detvmining if s change is"withia the general scope of the contract' for
purposes of the "Changes" clausd The oor~chuion of the Federal Circuit on this question
was that in cltCidiag whether a dssaga must be? justified as a new solasource proarrement,
the proper ttst is whtsluc s change was "within. the scope of the original competition." and
that this test was 'stighdy different" from the test used in litlgatior- over whether a change
was s breach of contract. The "scope of the competition" test and the "scope of the
contract" test, used in breach easesa have a different focus. In breach litigation, the focus
is on what tho contractor should have anticipated to be within the scope of the contract.
~ protest litigation, the focus is on what the competitors should have anticipated to be
whhln the scope of the competition, i.e., the scope of the entire original procurement in
comparison to the scope oftbe contract as modified. Thus, a broad original competition
may validate a broader range of later modificatkons wkthout Rrrther Competitive
procedures. AT~T Co~nmianication~, Supra.
The'~anQe of Contract Modifications
Contract utodifications fall on s eontimium or spectrum reflectiang whether the original
appropriation that fimded the end item on contract should be used to fund s contract
modification or whether a new (current) appropriation should be used.
Ax one end of the spectrum are increases is original obligations due to escalation, overnu+~
or other rost growth; inecafive or sward fees; and, claims arising oc: of the . .
undertaking. Adjustrnents in oblig$tions for these reasons are chargeable to the original
appropriation fending the end item on flu contract (with limited exceptions such as
Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
 Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
iatremmtal funding of RDTdcE efforts [3600 funds) or circumstances lavohring canceled
approprtations).
At the other end of the spectrum are modifications that art clearly 'outside of the ge?val
scope of the contract," such as increases in quantities of end items or other "new work."
Included in this category of "outside the scope of the contract" fret fiscal law purposes
would also 6c pelted options for additional producdoa Even though the prices of such
options were evaluated as part of the original conhxct awtrd.doei:;on and such options
arse "~vlthin the scope" for prate law purposes pursuant to FAR 6.001(c). Contract
modifications adding such e~'orts are c]utrgoahle to new (current) appropriations. Thus,
the Hiles seem clear far changes at the eatremc+s Of the spectrum.
Between these respective ends of the spectnu~o, however, are a variety of contrail
modifications that, for various legal and contractual purposes, are within the general
scope of the original competition" and arguably "within the general scope of the contract."
However, given the individual special circumstances of such cases. soma of these typo of
contract modifications should be funded arith the original appropriatioai that funded the
cad ~itern, whfie others should be funded with aareat year fiords.
Vutually sll programs encounter engineering changt proposals (ECPs). Many, if not
most, ECPs are needed to corract defects in apccificationa, make design changes to
product an BCCtpiablC product which :azls~fiies the original requirement, or Incorporate
technology advane~ which facditato achievanmt of the original requireaurn. Govenunent
contraeu providt for this in the "Changes" clause which aUaws the cantracdng officer to
make changes "within the general scope of the coAVuc.t" in drawings, designs, or
specifications whhout breaching the contract. These changes are funded with the
appropriation originally used for the end item. (Not applicable to incrementally lf~nded
R,D,TBcE.)
However, in major or complex programs there can be ECPa that art not of this "garden
varielp " Those include ECPa that ~,~, ca a~ to a weapon or system. Tha Had for the
ECP often arises from new threat assessments or new or rtvised statements of need or
from sow o,~ de o? fthe program_ i.e., changes needsd to~intaf'ace, or be compat~le,
with other weapons or systems. These ECPs are often of the type that pre be justified a:
being "within the general scope of the original competition" and, in many cases, c~a also
be justi$cd as bei~ "arithin the general scope of the contract." Thus such ECPa can bt
ordered under tt contract modification citing the authority of the "Changes" dausa The
that such mod~ficatioas add to the system, however, astea repraeat Wads of
cement origin beyond the originally ocprcsscd bons-5de need. Moreover, du large dollar
value of such ECPs makes it impractical for: program director to-have been prescient and
have budgsted for though funds for this type of change when the original budget was
submitted for the end item that is now in production. More importantly, even if s request
for such funds was sub.-~tted in the original budget r+equeat, it would almost asativ:~lly Hat `
bave survived the budget approval process, since it would not have repr~eaeated any then
currently documented need. .
Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
 Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
Additionally, changes of this type couid [in some in.~tances - but~not aln be brokm out
for placenieat on separate contracts. Consider the case of a threat-drlveo change to
incorporate aself-defense alectronics suite (e.g., a radar warning roceivcr or s c~bxff
dispenser) on a transport airoaft. When such a change occurs during production,
separate, and independently justi~6able, easos c~tn be made for directing the prime
contractor ~.e., the one building the airplane) to do the work or obtaining an electronics
contractor do the work and fiunish the kit as Governmelrt property to ttu airc~t
mulut3tcturer. In the former~case, ifan inflewble policy were imposed, demanding use of
odd year Rinds whenevrr the "Changes" clause is cued as procauema~t authority, the use of
the fiscal yenQ''s fund: obfig?ted for the origtnal aircraft production would be required,
evrn though the self-defense dectronics suite requirennent grew out oftbe need to meet a
tbrest which was not even irnown to exist in the year the original contract was written Ia
the latter case, brtiakout for a separate contract, application of the same policy would
result in fluids currerrtly available for cbli~ation being used. Thi: kind of icon=steal
nsCtisor catatn B-18 de,&nsive avionics systCm change:
were "within the scope" for fiscal pwposes and thus efigi'ble for use of arpired firrids, cited
a prior Comptroller General conclusion that "a rbange would be deemed to be within the
scope of the original contract if it was ~s~nti~sQ~tf~tint of [original] contrsd '
tnquirements," sad 8uriher coackuded that "tLe modifications appear to be desi~sed to
enstrra deliver; of a defensive avionics system t!>st contbrms as dosdy as possrble to the ~ `
ayatertt fbr which the Air Force originally contracted," (emphasis addai) GAO/NSIAO-89-
Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
 Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
209, B-?35114, at p.5: 1`his ilh~strates the more constrained viL?w of "scope" in the fiscal
smsq when justitlring the use of prior year fi~ading
There is ao attempt hereto expand or abuse the goverammt's atsibority to make changes
under the pcocasr~ement suthorhy of the "C1~aanges" CtaUS~ Nor ~ there say attempt here
to justify the use of the "Changes" clause to conduct "pew procursmeat" which etearly
requires either the use of i:ompetitiv~e procedures or the procGSSing of a J~A under' the
ptovisions of CICA. (For example, s change to form, fit, or fimction of such great
magnitude as to change the essential purpose of the cantraot and thus place the proposed
modification outside the Contesaplation of the parties to the original cx~pedtiots would be
new procurement.) Rather, the intes>t here is to netognize that the wide laude
caareaatty asvaa~abls to the government ip acercising its discretion to order modifications
Hader tbs "Changes" clauses without obtai>ring competition, there are differestt 5inding
requirements. Thus, is exen:ising its disc~ction under the "Changes" clause, the
contracting activity must distisiguisli between (i) thou eharage~ which are in Ssrtherance of
the Rilfillment of die boas fide acod being satisfied by the underlying contractual
raxluvement where relation back to the fiscal year appropriation fiusding the uadedying
contract is required, and (~i) those which are properly within tbs procurement sastlsority of
the "Changes" clause, but which, nonetheless, in response to new or amended
requirements, mndi~- sa item's ori~nally speci$ed form, fit, or fuacdon to add capability
or increase and item or performance tQ satisfy s currcat fisatl ya~r need. These
latter changes stprrseat s bow $da need of the cimmt 8tca1 year.
Current guidaaax is constitmt with this iisndirag ratia~siale. ixoz eocample, the 10 July 1992,
SAF~FbrID Guidance (Memorandum tom Dep Assist Secretary (Budget) ~r an
MAJCOM/FpA/DRU ComptronerslCoag, 14 July 1992), at page 3-S, para. 3h,
("Condition Two") states: "Within scope coatsact changes tsxiist use the same S.~cal year
fluids as the rrlated obligation l!n~ess t_h na-fide need rula~for the .tee ~eea~ca:anot be
~."' (emphasis added) Thus, a modification which adds capability air changes
performance beyond the origiasIly stated need, would be captured by the words beginning
'unless" and ~aroadd be Smded with eurreat finds. Fw~thher; pare 3i, page 3-6, ("Condition
Three") lists those transactions which for Ruid'uig purposes constitute changers is scope
and must use caureist year Rinds. Included is "(S) cbaages to form. $t, or function of~end
items ~yond the scoff; of the orI?i~na~ lap tian_" (emphasis adder ?l~s
description's of conditions two and tbra (pares. 3.h and 3 i.) are resaforced by the
statement at pare 3.d, page 3-1, 'Also, use the boat fide steed rote to properly svslw~te ~
within-scone and chanac in eontta~acope~,rarisa~ettons,. We will tvahtate alt contract
~hangdupwa:~d obligation adjustment requests is light of the bona-Sde aced rails
regardless of the condition identified by the requester." I:ikcwise? in response to s recent
lhnding issue on DSP,. SAFIF~ advised (Memorsadism firom SAFlFMS far HQ
AFMGF~ 7 Mar 1994 "Other eacamplas of1'~y curresrt year costs are..s~
r-'-=-zl ~ '- ' ~ s #hat int:r+ea_~ d itettt ~rt,l!rtv OT~CrfOTRlLnt7e a_* a i~dL*1Cdf1e2it_"
(emphasis adder.
Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
 Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4
~sn .
(a) A contract snodiSeation which increases quantities of deliv~asble and items or
:o afters the nature of the work as to' be outside of the scope of the corrtraa ' ' Y
awarded must be tGadedwith appropriations which are aurently svadsble flx obligation
on the date the comiact modificstion is iswai. For multiple year appropriations:, use the
finds of the particular Racal year(s) in which the apeei8e rr~uir~snt to be satisfied was
Proms. aPP~'~+.~ appropriated (uicludos incremcrrtally funded RdtD). (See
AFR.170-8, Paragraph 8.)
(b) Except ss noted in (c) below, changes which are within the scope of an
s~dsting contract fiinded with procuremsnt appropriations (3010, 3020, 3080 ~ be
fi,mded from the same 89ca1 year proauement appropriation as was used to fisnd the bait
requircaieart to bs modified. Thi:.rule spplie: eve if the Sscal year account to be cbargtd
bas expued (but not closed/canceled).
(c) If a contract change chargesbls to procurement accovmt (3010, 3020, 3080)
(i) modifies an item's orifpnany specified form, 5t or function or adds aP~~Y or
incrri:ts end item utiLty err performaacs; ~ (3i) such modification, ieprestttts the
i~]Imm~t of >r need or requirement of a current Sscal year (but not of the origlaal conrtract
period), then thou c~arent focal year sppropriations must be usod. [One char 3ndteatinn
that a modi8catiori represents flilfillmcnt of a new or requirnnmi of a ourreat.$scal year'
would be If the mod'i8catioa is reaso>7sbly described la the budget }uaaScatiam and
approval documentation (or a properly approved reprogrammnng) foz a fiscal year
approprlution which is sdll c~nrent] This rule ippGet whether the requirmnest is sati:$ed
by issuance of a bilsda~af oar un~deral ca~amral ia~strumeot sad whetherr the
moc~ea nn o3stiag cantiact by mesas of art i~-scope t~hange under tlse "Changes" c~lwse,
an out-of-scope change, or pursuant to some other contract pro~vldon ar authorsty.
Director
Air Fora Materiel Command Law Center
to
Approved For Release 2011/10/19 :CIA-RDP09K00541 8001000090019-4