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B-198074 1 (1981-07-15)

handle is hein.gao/gaobadjob0001 and id is 1 raw text is: DECISION FILE: B-198074 THE COM4TROLLER ZENERAL OF THE UNITED BTATES WASHINGTON. 0 .C. 20548 DATE: July 15, 1981 MATTER OF: Funding of Replacement Contracts DIGEST: 1. An agency's original obligation of funds for a contract remains available for a replacement contract awarded in a subsequent fiscal year where: (1) existing contract was terminated for default and that termination has not been overturned by a Board of Contract Appeals or a Court; or (2) replacement contract has already been awarded by the time a competent administra- tive or judicial authority converts the default termination to a termination for convenience of the Government. 2. An agency's original obligation of funds for a contract is extinguished and thus not available for a replacement contract where: (1) existing contract was terminated for convenience of the Government on aqency's own initiative or upon reconmrendation of GAO; or (2) existing contract was terminated for default and agency has not executed a replacement contract prior to order by competent administrative or judicial au- thority converting default termination to a termination for convenience of the Government. 3. A replacement contract awarded after original contractor has defaulted may be supported by the original obligation of funds even if awarded in a subsequent year if it satisfies the following criteria: (1) it must be awarded without undue delay after original contract is terminated; (2) its purpose must be to fulfill a bona fide need that has continued from the original contract; and (3) it must be awarded on the same basis and be substantially similar in scope and size as the original contract. The Environmental Protection Agency (EPA) requested a decision on the source of funding for replacement contracts. The EPA's questions arose in connection with EPA contract Nurrber 68-03-6064 with Yale Industrial Trucks, Baltimore/Washington, Inc. However, some of the questions apply to hypothetical situations that are different from the contract situation. The answers given below reflect the different rules applicable to different sets of facts. (4~~ J(6~c arire 191r e(I ii'< , 'rA ;o rl

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