Operational and Maintenance Funds

DTIC does not place restrictions on types of funds that may be accepted under IAC contracts. The sending organization must verify that funds are appropriate for the intended purpose. Limitations on the original appropriation sent to DTIC remain; use of DTIC's RDT&E authority does not change the conditions and limitations imposed on the use of funds (per DoD FMR Volume 11A, Chapter 3, 030104).

The contract cites DTIC's funding line under reimbursable authority (per Title 10, USC, section 2205). The customer (sending organization) is responsible for certifying the funds submitted to DTIC are for the proper purpose; certification is made on the DD Form 448, MIPR (per DoD FMR Volume 11A, Chapter 3, 030402). For funds accepted under DTIC reimbursable authority (Cat I MIPR) DTIC calculates earnings based on an estimated burn rate documented in the contract modification.

Most IAC TATs are considered to be severable, meaning that the government derives value before the entire scope of the TAT has been completed. For severable services, Operational and Maintenance (O&M) funds must be expended within 12 months of the date of obligation (when they are placed on contract). If a particular TAT is considered non-severable, it must be fully funded upon award; in such a case, O&M funds may be used and expended over a period of performance (PoP) that exceeds 12 months.

Based on DTIC and AFICA's review of past contract actions, in the context of the above DoD guidance, we have determined that the following will apply to any O&M funds received for IAC contracts. This applies to O&M funds received for new orders, as well as incremental funding actions funded with O&M on any existing orders.

    • Each O&M MIPR must specify what tasks under the TAT SOW it is funding.

    • If O&M funding (which has a 12 month obligation limit) is the only funding received to start a new TAT, then the subject TAT will be limited to no more than an overall 12 month period of performance. Subsequent option years for the base period must be funded with future year funding at the time of option exercise, see FAR 32.703-3.

    • Each O&M MIPR received will be placed on its own/separate 12-month CLIN; for example:
      Current TAT PoP is 1 Jan 13 to 31 Dec 15 - O&M MIPR for incremental funding is placed on contract on 1 Dec 13; that MIPR will be placed on a CLIN valid 1 Dec 13 to 30 Nov 14; all funds must be expended and work completed during that period; any funds not expended may not be "rolled over" into another CLIN or used for other tasks after 30 Nov 14.
There are 3 options for TATs that will be initially funded/awarded with only O&M funds:
Option 1 - The total TAT period of performance (PoP) will be limited to 12 months.
Option 2 - Requirements will need to be separated into 12-month periods, with the total TAT PoP not to exceed 36 months; for example:
Base Period: 1 Jan 12 - 31 Dec 12 (12 month PoP)
Option Period 1: 1 Jan 13 - 31 Dec 13 (12 month PoP)
Option Period 2: 1 Jan 14 - 31 Dec 14 (12 month PoP)
Overall TAT PoP: 1 Jan 12 - 31 Dec 14 (36 months)
Note - Under this option "No cost time extensions” shall not be allowed.
Option 3 - Requirements will need to be separated by tasks, each task cannot to exceed a 12-month PoP. The total TAT PoP may not to exceed 36 months; for example:
Task 1-2: 1 Jan 12 - 31 Dec 12 (12 month PoP)
Optional Task 3: 1 Jun 12 - 31 Mar 13 (10 month PoP)
Optional Task 4-5: 1 Jan 13 - 31 Dec 13 (12 month PoP)
Optional Task 6-8: 1 Aug 13 - 31 Jul 14 (12 month PoP)
Overall TAT PoP: 1 Jan 12 - 31 Jul 14 (31 months)
Note - Under this option there cannot be any gap between the periods of performance of individual tasks, through the periods may overlap.
TATs that will be initially funded/awarded with only O&M funds, but which will later during the PoP be funded with RDT&E funds:
The initial period must not exceed 12 months, but a subsequent period to be funded with RDT&E/etc. may extend beyond 12 months; for example:
Task 1-2 (O&M): 1 Jan 12 - 31 Dec 12 (12 month PoP)
Optional Task 3 (RDT&E): 1 Apr 12 - 31 Dec 14 (33 month PoP)
Optional Task 4-5 (O&M): 1 Jan 13 - 31 Dec 13 (12 month PoP)
Optional Task 6-8 (O&M): 1 Jan 14 - 31 Dec 14 (12 month PoP)
Overall PoP: 1 Jan 12 - 31 Dec 14 (36 months)
Note - If RDT&E funds are not available to execute the optional task, that task may not be executed with O&M funds
TATs that will be initially funded/awarded with both O&M and RDT&E (or other non-O&M funds):
Each O&M MIPR will be placed on a separate CLIN (per 1 & 2 above)
All RDT&E MIPRs will be placed on one CLIN with the total PoP not to exceed 36 months
Note - There is no "minimum percentage" of non-O&M funding for this to apply; however, the contracting officer's discretion will determine whether the amount is sufficient to warrant a PoP exceeding 12 months, in accordance with the above guidance


Appropriations and Authority

For information on DoD Appropriations, you can use the Treasury Financial Manual as a reference.The Economy Act is the general statutory authority that allows customers to order services from DTIC on a cost-reimbursable basis. The OSD comptroller annually reviews and approves a specific limit and funding line for DTIC's reimbursable authority.