B-155876, JAN. 14, 1965, 44 COMP. GEN. 399

B-155876: Jan 14, 1965

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THE COST OF WHICH WAS CHARGED TO FUNDS APPROPRIATED FOR FISCAL YEAR 1963. PROJECT THAT IS NOT A BONA FIDE NEED OF THE 1963 FISCAL YEAR. THE STUDY NOT BEING WITHIN THE SCOPE OF THE ORIGINAL CONTRACT SHOULD BE THE SUBJECT OF A SEPARATE CONTRACT TO BE CHARGED TO THE APPROPRIATION AVAILABLE AT THE TIME A NEW CONTRACT IS EXECUTED. 1965: REFERENCE IS MADE TO LETTER DATED DECEMBER 31. THE CONTRACT IN QUESTION WAS NEGOTIATED UNDER AUTHORITY OF THE SMALL BUSINESS ACT. THE PURPOSE OF THE WORK IS STATED ON PAGE 3 OF THE CONTRACT AS FOLLOWS: THE PURPOSE OF THIS STUDY IS TO REVIEW REPORTS OF GOVERNMENT SPONSORED RESEARCH AND DEVELOPMENT IN A PARTICULAR INDUSTRY. A QUESTIONNAIRE WILL BE DEVELOPED AND WILL ACCOMPANY THE DISTRIBUTION OF THE MATERIAL PREPARED. (3) TEST THE USABILITY OF THE MATERIAL DEVELOPED IN (2) ABOVE.

B-155876, JAN. 14, 1965, 44 COMP. GEN. 399

APPROPRIATIONS - AVAILABILITY - CONTRACTS - ADDITIONAL WORK NOTWITHSTANDING A STUDY MADE UNDER THE AUTHORITY OF THE SMALL BUSINESS ACT, THE COST OF WHICH WAS CHARGED TO FUNDS APPROPRIATED FOR FISCAL YEAR 1963, PROVED TO BE INSUFFICIENT AND INCONCLUSIVE, THE CONTRACT FOR THE STUDY MAY NOT BE AMENDED TO PROVIDE FOR AN ADDITIONAL STUDY BASED ON 1964 RECORDS, CHARGING THE COST TO UNEXPENDED 1963 FUNDS, THE PROPOSED STUDY UNESSENTIAL TO THE FULFILLMENT OF THE ORIGINAL STUDY CONSTITUTING A SEPARATE, THOUGH RELATED, PROJECT THAT IS NOT A BONA FIDE NEED OF THE 1963 FISCAL YEAR, AND THE STUDY NOT BEING WITHIN THE SCOPE OF THE ORIGINAL CONTRACT SHOULD BE THE SUBJECT OF A SEPARATE CONTRACT TO BE CHARGED TO THE APPROPRIATION AVAILABLE AT THE TIME A NEW CONTRACT IS EXECUTED.

TO THE ADMINISTRATOR, SMALL BUSINESS ADMINISTRATION, JANUARY 14, 1965:

REFERENCE IS MADE TO LETTER DATED DECEMBER 31, 1964, FROM THE ASSISTANT ADMINISTRATOR FOR ADMINISTRATION, REQUESTING OUR OPINION REGARDING THE AVAILABILITY OF FUNDS APPROPRIATED TO THE SMALL BUSINESS ADMINISTRATION FOR THE FISCAL YEAR 1963 FOR THE PAYMENT FOR ADDITIONAL WORK CONTEMPLATED UNDER A PROPOSED CHANGE ORDER TO A CONTRACT EXECUTED ON JUNE 27, 1963.

THE CONTRACT IN QUESTION WAS NEGOTIATED UNDER AUTHORITY OF THE SMALL BUSINESS ACT, AS AMENDED, 15 U.S.C. 631-647, WITH THE BJORKSTEN RESEARCH LABORATORIES, INCORPORATED, A PRIVATE RESEARCH ORGANIZATION, FOR THE PERFORMANCE ON A COST-PLUS-A-FIXED-FEE BASIS, IN THE ESTIMATED AMOUNT OF $27,970.00 ($26,170 ESTIMATED COST, PLUS $1,800 FEE), OF A FEASIBILITY STUDY IN THE FIELD OF PLASTICS. THE PURPOSE OF THE WORK IS STATED ON PAGE 3 OF THE CONTRACT AS FOLLOWS:

THE PURPOSE OF THIS STUDY IS TO REVIEW REPORTS OF GOVERNMENT SPONSORED RESEARCH AND DEVELOPMENT IN A PARTICULAR INDUSTRY; DEVELOP FROM THESE REPORTS DESCRIPTIONS, DATA SHEETS AND USAGES; TEST BY SAMPLING THE USEFULNESS OF THE MATERIAL DEVELOPED; AND, SUGGEST APPROPRIATE PROCEDURES UNDER WHICH SIMILAR WORK COULD BE UNDERTAKEN IN OTHER INDUSTRIES.

IN KEEPING WITH THE OBJECTIVES STATED IN THE CONTRACT, THE CONTRACTOR HAS BEEN DIRECTED TO PERFORM THE FOLLOWING WORK:

(1) REVIEW THE ABSTRACTS OF THE 5,000 REPORTS CODIFIED GENERICALLY UNDER PLASTICS AT THE DEFENSE DOCUMENTATION CENTER. SELECT FROM 800 1000 REPORTS CONTAINING SIGNIFICANT DEVELOPMENTS IN THE PLASTIC ARTS FOR STUDY AND ANALYSIS.

(2) PERFORM EVALUATION STUDY OF THESE REPORTS AND PRODUCE 500 DESCRIPTIONS OF THE INDUSTRIAL IMPLICATIONS WITH SUPPLEMENTAL SUPPORTING DATA SHEETS. A QUESTIONNAIRE WILL BE DEVELOPED AND WILL ACCOMPANY THE DISTRIBUTION OF THE MATERIAL PREPARED.

(3) TEST THE USABILITY OF THE MATERIAL DEVELOPED IN (2) ABOVE, THROUGH DISSEMINATION TO A SAMPLE OF 2,500 SMALL BUSINESS CONCERNS SELECTED FROM SPECIFIED SOURCES. COLLATE AND TABULATE ALL INFORMATION OBTAINED.

(4) EVALUATE DATA AND PREPARE FINAL REPORT, INCLUDING A FEASIBILITY ESTIMATION OF THIS APPROACH TO ASSIST SMALL BUSINESS CONCERNS OBTAIN THE RESULTS OF GOVERNMENT-FUNDED RESEARCH RELATED TO PLASTICS AND RECOMMENDATION OF A SYSTEM OF PROCEDURES THROUGH WHICH OTHER AREAS OF RESEARCH COULD BE MADE AVAILABLE TO SMALL FIRMS.

ARTICLE 4 OF THE CONTRACT, GOVERNING CHANGES, READS, IN PART, AS FOLLOWS:

THE CONTRACTING OFFICER MAY, AT ANY TIME BY A WRITTEN ORDER, MAKE CHANGES IN OR ADDITIONS TO THE INSTRUCTIONS AND SPECIFICATIONS, ISSUE ADDITIONAL INSTRUCTIONS OR REQUIRE ADDITIONAL WORK WITHIN THE GENERAL SCOPE OF THE CONTRACT. IF ANY SUCH CHANGE CAUSES AN INCREASE OR DECREASE IN THE ESTIMATED COST, OF, OR THE TIME REQUIRED FOR PERFORMANCE OF THIS CONTRACT, OR OTHERWISE AFFECTS ANY OTHER PROVISIONS OF THIS CONTRACT, AN EQUITABLE ADJUSTMENT SHALL BE MADE IN THE ESTIMATED COST OR PERIOD OF PERFORMANCE, DELIVERY SCHEDULE, OR OTHER TERMS OF THE CONTRACT, AND IN SUCH OTHER PROVISIONS OF THE CONTRACT AS MAY BE SO AFFECTED, AND THE CONTRACT SHALL BE MODIFIED IN WRITING ACCORDINGLY.

THE PROPOSED CHANGE ORDER WOULD REQUIRE THE CONTRACTOR TO PERFORM SIMILAR WORK, AT AN ADDITIONAL COST OF $14,000.00, INVOLVING RESEARCH REPORTS ACCUMULATED AT THE DEFENSE DOCUMENTATION CENTER IN THE FISCAL YEAR 1964. THE BASIS FOR THE PROPOSAL IS SET FORTH BY THE ASSISTANT ADMINISTRATOR AS FOLLOWS:

* * * THIS ADDITIONAL WORK IS NECESSARY BECAUSE THE DATA GENERATED UNDER THE ORIGINAL CONTRACT IS INSUFFICIENT AND INCONCLUSIVE SO THAT MORE INFORMATION IS NEEDED IN ORDER TO DETERMINE SUITABLE METHODS FOR DISSEMINATING GOVERNMENT RESEARCH AND DEVELOPMENT DATA TO SMALL BUSINESS CONCERNS. THE DATA PRODUCED UNDER THE ORIGINAL CONTRACT, WHILE USELESS WITHOUT FURTHER DATA, IS SUFFICIENTLY PROMISING TO JUSTIFY THE EXPENDITURE OF ADDITIONAL FUNDS. IT IS OUR OPINION THAT THE ADDITIONAL WORK IS WITHIN THE SCOPE OF THE CONTRACT.

IT IS REPORTED THAT THERE ARE UNEXPENDED 1963 FISCAL YEAR FUNDS SUFFICIENT TO DEFRAY THE ADDITIONAL COST OF $14,000.00. ALSO, THERE IS CITED OUR DECISION B-105555, DATED SEPTEMBER 26, 1951, RELATING TO THE APPROPRIATION CHARGEABLE WITH THE COST OF WORK PERFORMED UNDER A REPLACEMENT CONTRACT.

THE GENERAL RULE RELATIVE TO OBLIGATING A FISCAL YEAR APPROPRIATION BY CONTRACT IS THAT THE CONTRACT WHICH IMPOSES THE OBLIGATION MUST BE MADE WITHIN THE FISCAL YEAR COVERED BY THE APPROPRIATION SOUGHT TO BE CHARGED AND THE SUBJECT MATTER MUST CONCERN A BONA FIDE NEED ARISING WITHIN THE FISCAL YEAR. 32 COMP. GEN. 565 AND DECISIONS CITED THEREIN. DETERMINATION OF WHAT CONSTITUTES A BONA FIDE NEED OF THE SERVICE OF A PARTICULAR FISCAL YEAR DEPENDS IN LARGE MEASURE UPON THE FACTS AND CIRCUMSTANCES OF THE PARTICULAR CASE, THERE BEING NO GENERAL RULE FOR APPLICATION TO ALL SITUATIONS. 37 COMP. GEN. 155, 159.

FROM THE FACTS PRESENTED BY THE ASSISTANT ADMINISTRATOR, IT IS APPARENT THAT ON JUNE 27, 1963, THE DATE THE CONTRACT WAS EXECUTED, THERE WAS A BONA FIDE NEED FOR THE STUDY OF THE EXISTING GOVERNMENT RECORDS. THEREFORE THE COST OF THE STUDY OF THOSE RECORDS WAS A PROPER CHARGE TO THE FISCAL YEAR 1963 APPROPRIATION.

IT APPEARS, HOWEVER, THAT THE WORK CALLED FOR BY THE CONTRACT HAS BEEN COMPLETED, TO THE EXTENT PRACTICABLE ON THE BASIS OF THE RECORDS AVAILABLE AT THE TIME IT WAS PERFORMED. THE REPORTED FACT THAT THE STUDY DID NOT PRODUCE THE EXPECTED RESULTS, APPEARS NOT TO BE BECAUSE OF ANY DEFICIENCY IN THE PERFORMANCE OF THE CONTRACTOR, BUT BECAUSE THE RECORDS AVAILABLE WERE INADEQUATE. IT IS NOW REPORTED TO BE THE OPINION OF SBA OFFICIALS THAT A SIMILAR STUDY OF ADDITIONAL GOVERNMENT RECORDS COMPILED DURING THE FISCAL YEAR 1964 IS REQUIRED IN ORDER TO MAKE USE OF THE DATA PRODUCED UNDER THE 1963 CONTRACT. THE QUESTION FOR DECISION, THEREFORE, IS WHETHER THE SECOND STUDY MAY BE CONSIDERED ADDITIONAL WORK WITHIN THE SCOPE OF THE CONTRACT WHICH MAY BE AUTHORIZED UNDER THE CONTRACT CHANGES CLAUSE AND THE COST OF WHICH WOULD THEREFORE BE CHARGEABLE TO THE FISCAL YEAR 1963 APPROPRIATION.

IN OUR DECISION B-105555, DATED SEPTEMBER 26, 1951, CITED BY THE ASSISTANT ADMINISTRATOR, WE HELD THAT THE COST OF A REPLACEMENT CONTRACT AWARDED WITHOUT UNDUE DELAY FOR THE COMPLETION OF CONSTRUCTION WORK AFTER DEFAULT BY THE ORIGINAL CONTRACTOR WAS A PROPER CHARGE AGAINST THE APPROPRIATION AVAILABLE FOR THE COST OF THE WORK UNDER THE ORIGINAL CONTRACT. THE BASIS FOR THAT DECISION WAS THAT THE APPROPRIATION WAS OBLIGATED WHEN THE ORIGINAL CONTRACT WAS EXECUTED AND THE NEED FOR THE WORK CONTINUED TO EXIST UP TO THE TIME OF THE AWARD OF THE REPLACEMENT CONTRACT. THE CIRCUMSTANCES INVOLVED IN THE CASE NOW UNDER CONSIDERATION, HOWEVER, ARE DISTINGUISHABLE FROM FACTS INVOLVED IN THAT DECISION IN THAT THERE HAS BEEN NO DEFAULT ON THE PART OF THE CONTRACTOR (BJORKSTEN) AND THE WORK REQUIRED BY THE CONTRACT HAS BEEN COMPLETED. THE PROPOSED STUDY OF THE ADDITIONAL RECORDS COMPILED IN THE FISCAL YEAR 1964 IS THEREFORE NOT ESSENTIAL TO THE FULFILLMENT OF THE 1963 CONTRACT REQUIREMENTS, BUT WOULD CONSTITUTE A SEPARATE, THOUGH RELATED, PROJECT THAT WAS NOT A BONA FIDE NEED OF THE FISCAL YEAR 1963. ACCORDINGLY, IT IS OUR VIEW THAT SUCH STUDY IS NOT WITHIN THE SCOPE OF THE 1963 CONTRACT BUT SHOULD BE THE SUBJECT OF A SEPARATE CONTRACT, THE COST OF WHICH WOULD BE CHARGEABLE TO THE APPROPRIATION AVAILABLE AT THE TIME SUCH CONTRACT IS EXECUTED.

FOR THE REASONS STATED, WE MUST CONCLUDE THAT THERE IS NO AUTHORITY TO ISSUE A CHANGE ORDER UNDER THE 1963 CONTRACT FOR THE ADDITIONAL STUDY, AND THEREFORE, FUNDS APPROPRIATED TO SBA FOR THE FISCAL YEAR 1963 ARE NOT AVAILABLE FOR THE COST OF SUCH WORK.