Department of Health and Human Services--Multiyear Contracting and the Bona Fide Needs Rule
B-322455: Aug 16, 2013
- Full Report:
Without statutory authority, fixed period appropriations are only available for the genuine or bona fide needs arising in the period of availability for which they are made. Thus, an agency may not obligate current appropriations for the bona fide needs of future fiscal years without statutory authority. One provision of the Federal Acquisition Streamlining Act, now codified at 41 U.S.C. 3903, provides a statutory exception to the so-called bona fide needs rule. Section 3903 authorizes executive agencies to obligate current appropriations to enter a multiyear contract for the acquisition of both nonseverable and severable services for the bona fide needs of up to five fiscal years.
The bona fide needs rule applies to cost-reimbursement contracts, just as it does to other contract types. An agency may use a cost-reimbursement contract to procure severable services that cross fiscal years if done in conjunction with multiyear contracting authority. When modifying a cost-reimbursement contract to procure additional severable services, an agency must also ensure the modification complies with the bona fide needs rule or one of its statutory exceptions at the time of modification.