AEI 2011-04, When Work Can Begin on an Agreement for a Non-U.S. Geological Survey (USGS) Customer
Issuance Date: March 28, 2011
Expiration Date: This IM replaces APS 2006-08 and is effective immediately and will remain in effect until its provisions are superseded.
1. Purpose. This Instructional Memorandum (IM) is being issued to provide guidance on when work can begin on an agreement for a non-USGS customer. The IM describes the limited circumstances under which USGS managers may begin work for a non-USGS customer in the absence of an agreement signed by both authorized USGS and customer officials. The IM also establishes the roles, responsibilities, and approvals required before such work may be initiated.
2. Background. The USGS receives about 30 percent of its funding through partnerships with more than 2,000 Federal, Tribal, State, and local agencies to address a broad spectrum of natural science issues. Most of the funding agencies have been long-term partners, fully cooperating in mission critical data collection, basic research, and interpretive studies. To enter into an agreement with a non-USGS customer, the USGS must have legal authority that permits the work to be performed and which authorizes the USGS to accept and retain the funds. In many instances, the legal authorities and funding instruments used to accept the funds are specific to the type of customer and contain requirements which must be fulfilled in order for the USGS to legally perform the work and to properly record and account for all transactions. For charges to be accounted for as reimbursable, a signed agreement is required.
During fiscal year 2003, as a result of the General Accounting Office classifying intragovernmental (between Federal agencies/entities) transactions as a Governmentwide material weakness, the Office of Management and Budget (OMB) established standard business rules that all Federal agencies must follow. These rules include requirements for the agency acquiring the goods or services (the agency funding the agreement) to authorize/approve the agreement, include necessary funding information/citations, and obligate the funding prior to transmittal of the agreement to the agency providing the goods and services. The business rules define acceptance of an agreement as when it is signed by both partners. Selling agencies are required to record an unfilled customer order immediately upon receipt and acceptance of an authorized intragovernmental order. The USGS is implementing the new business rules as OMB and Department of Interior policies and processes are received. The only permitted exceptions to the business rules issued by OMB are for national emergencies and for national security considerations.
In addition to issuing the new business rules for intragovernmental transactions (which only apply to transactions between Federal agencies), OMB issued additional information to agencies regarding violations of the Antideficiency Act (Section 145.6, OMB Circular No. A-11, issued July 2003). This section applies to all fiscal transactions, regardless of the source of funds; e.g., appropriated funds and funds received from other Federal agencies, the public, State governments, etc. Section 145.6 instructs agencies as follows:
"You may not obligate against anticipated budgetary resources before they are realized even though the anticipated budgetary resources have been apportioned. If you incur an obligation against an anticipated budgetary resource, such as anticipated spending authority from offsetting collections, then you will have a violation of the Antideficiency Act . . . . If you incur obligations against unobligated balances that are not available for the purpose or amount so obligated in the account, then you will have a violation."
As a result, Federal agencies must have a realized budgetary resource; e.g., appropriated funds, spending authority due to a signed reimbursable agreement, etc., available for the purpose of the obligation before the Federal agency may incur an obligation. If the agency incurs an obligation without a realized budgetary resource; e.g., incurs expenses or obligations for a reimbursable customer without a signed agreement, or incurs obligations against funds which are not available for the purpose of the obligation; e.g., charges costs from a reimbursable customer to another source of funds whose purpose does not include support of the type of work for which the reimbursable obligation is incurred, the agency would have a violation of the Antideficiency Act.
3. Beginning Work for Non-USGS Customers.
A. Private Entities, Foreign Countries, and International Organizations. No work may begin, nor expenses incurred, prior to an agreement being signed by authorized USGS officials and officials from the private entity or foreign country. In addition, prior to incurring any expenses, an advance payment must be received by the USGS and recorded in the Financial and Business Management System (FBMS), unless there is specific authority which precludes the need for an advance; e.g., the Stevenson Wydler Technology Transfer statutes, the Foreign Assistance Act, etc.
B. Federal. Conducting reimbursable work for other Federal agencies is challenging because many Federal agencies (including the USGS) are reluctant to sign reimbursable agreements until an appropriation is enacted or the continuing resolution is passed through the end of a fiscal year. Since mission-related, reimbursable work for other Federal agencies is an important source of revenue to the USGS, authority is granted to approve work on unsigned agreements that meet the criteria described in paragraph D below.
C. State, Municipality, Territory, Possession, or Political Subdivision Thereof. Only in exceptional circumstances should managers request an exception to the general USGS policy requiring signed agreements prior to initiation of work. All exception requests must be for work that meets USGS mission requirements as outlined below.
D. Criteria for Beginning Work.
(1) Time- and mission-critical activities associated with national emergencies (including natural disasters), national security considerations, or other extreme events. An essential part of the USGS mission is to monitor and document the effects of significant events associated with hazards and Homeland Security activities, and to provide timely information to emergency management and other Government authorities; e.g., Federal, State, and local. Although there may be verbal agreement between the USGS and the Government agency to fund the work, there often is not enough lead time to fully execute an agreement prior to initiating the work, and the nature of the event does not allow for normal business processes.
(2) Ensuring the continuity of ongoing, long-term data collection, networks, and interpretive projects. Long-term, continuous record data are critical to the scientific integrity of many USGS data networks. These data networks provide valuable information that is used to manage and preserve natural resources throughout the Nation. Also, there are situations where several agencies are supporting the same network or project effort and where all but one of the agencies has signed the agreement. It may not be economically in the best interest of the Government or physically possible to discontinue stream gages and project activities for a few weeks waiting for the successor agreement to be processed, or the break in data collection may jeopardize long-term science objectives.
(3) Risk Analysis. Prior to requesting an exception, the Science Center Manager that negotiates the agreement must evaluate the financial risk of starting work without a signed agreement. To minimize financial risk, the Science Center Manager must identify funds they will use to cover expenses if the agreement is not eventually signed. If a source of funds is not available in their center, they should work with the Regional Executive (Field Cost Centers) or Associate Director (Headquarters and National Capabilities Cost Centers) to identify these funds. In addition, requests should be limited to agreements with existing customers whom the USGS has a longstanding history of agreement and funding renewal, and a reasonable expectation that the current agreement will be renewed. Another factor to consider in evaluating the financial risk for work with Federal agencies is whether the work will constitute an improper augmentation of the customer’s appropriations. To minimize improper augmentation risk, the work should meet a mission need of the USGS, and the results of such work should be made available for the public benefit, not just the customer agency’s benefit.
E. Timeframe. Prior approval from the designated managing senior executive (Associate Director (AD) or Regional Executive (REX) is mandatory before work may begin for a non-USGS customer without a signed agreement. For agreements with State, Municipality, Territory, Possession, or Political Subdivision, three exception approvals can be issued within a single fiscal year for each reimbursable agreement. One waiver request is allowed for agreements with Federal agencies. The timeframe for these waiver requests are as follows:
(1) Agreements with State, Municipality, Territory, Possession, or Political Subdivision.
(a) Initial exception approvals are limited to a maximum period of 90 calendar days. For agreements received during the fourth quarter of a fiscal year, the maximum period will be through the date in September by which all agreements must be signed and recorded in FBMS for the final close of the fiscal year.
(b) A second exception approval period of 90 calendar days, or through the date in September by which all agreements must be signed and recorded in FBMS for the final close of the fiscal year, may be granted by the REX or AD if a signed agreement cannot be negotiated. Note: This would not apply to agreements received during the fourth quarter of a fiscal year.
(c) A third exception approval period of 60 days may be granted by the Associate Director for Administration and Enterprise Information if a signed agreement cannot be negotiated. Note: This would not apply to agreements received during the fourth quarter of a fiscal year.
(d) If an agreement is not signed by the end of the third exception approval period or by the date in September by which all agreements must be signed and recorded in FBMS for the final close of the fiscal year, all work and expenditures must cease. All outstanding expenditures and indirect costs will be charged to the source of funds identified in the exception request.
(2) Agreements with Federal Agencies.
(a) The REX or AD will approve or deny the request. The approved waiver remains in effect from the approver’s signature date until 90 days after enactment of an appropriation or passage of a continuing resolution through the end of the fiscal year. All work must cease if the agreement is not signed prior to the end of the 90 days. All outstanding expenditures and indirect costs will be charged to the source of funds identified in the exception request.
F. Exception Request Process. Follow all procedures outlined in the Financial Operating Procedures Handbook Chapter 4, Section 12.
/s/ Karen D. Baker March 28, 2011
_____________________________________________ ______________
Karen D. Baker Date
Associate Director for Administration and Enterprise Information