Proposed Actions To Deal With Overobligations in Four Army Procurements

The legality and propriety of certain actions proposed by the Department of the Army to deal with overobligations in four separate procurement appropriations were questioned. There would be no legal objection to termination for convenience of those contracts for which there is not a critical requirement. The proposal to use current funds to liquidate prior year obligations is precluded by law. Issuance of no cost stop work orders, with the contracts remaining in effect, would be legal, but the need for deficiency funding should be disclosed to the Congress. Obtaining continued performance on a purported "contractor risk" basis is of dubious validity as a mitigation measure, and inclusion of interest payments is clearly unlawful.