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B-324146 1 (2013-09-12)

handle is hein.gao/gaobadptl0001 and id is 1 raw text is: c;AO U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 B-324146 September 12, 2013 The Honorable Harold Rogers Chairman Committee on Appropriations House of Representatives Subject: Office of Management and Budget Guidance on the Worker Adjustment and Retraining Notification (WARN) Act Dear Mr. Chairman: This letter responds to your request for GAO's opinion on questions arising from the memorandum issued by the Office of Management and Budget (OMB) on September 28, 2012, entitled Guidance on Allowable Contracting Costs Associated with the Worker Adjustment and Retraining Notification (WARN) Act. 1 You asked that we address four questions: (1) Is OMB's guidance mandatory or does it otherwise require a contracting officer to find WARN Act related costs that a federal contractor incurs in connection with a potential sequestration 2 allowable for reimbursement by the federal government under cost reimbursement type contracts? (2) Does a contracting officer have the discretion to determine if costs incurred for failure to comply with the WARN Act are reasonable? (3) Can an agency reimburse a contractor for any WARN Act related costs that exceed the contract's cost ceiling? (4) Does OMB's guidance prohibit reimbursement of WARN Act related costs incurred by a contractor in circumstances not addressed by OMB's guidance? As discussed below, we conclude that (1) OMB's guidance does not mandate that contracting officers treat WARN Act liability costs as allowable for reimbursement or otherwise alter a contracting officer's responsibility to apply the cost allowability requirements under the Federal Acquisition Regulation (FAR)3 to a contractor's request for reimbursement of costs; (2) a contracting officer has discretion to determine whether a contractor's costs incurred for failure to comply with the WARN Act are reasonable; (3) OMB's guidance does not alter the operation of a contract's limitation of cost or 1 OMB Memorandum M-1 2-19, Guidance on Allowable Contracting Costs Associated with the Worker Adjustment and Retraining Notification (WARN) Act (Washington, D.C., Sept. 28, 2012) (OMB Guidance). 2 Balanced Budget and Emergency Deficit Control Act of 1985, Pub. L. No. 99-177, as amended by the Budget Control Act of 2011. Pub. L. No. 112-25. 3 The FAR is set forth in title 48 of the Code of Federal Regulations (CFR).

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