2012-04-26

NPM 045-2012

Requesting Entity: Bureau of Treasury

Issues Concern: Multi-Year Contracts and the Multi-Year Obligational Authority

 

Details

Confirmation/comment that a Multi-Year Obligational Authority (MYOA) is not required for Multi-Year Contracts (MYC) of Security and Janitorial Services, which have regular annual appropriations.

[R]ules for extension of Security and Janitorial contracts are governed by the Revised Guidelines on Extension of Contracts for General Support Services. A reading of these guidelines will readily show that extension of contracts, although allowed, cannot be done through a MYC. Additionally, these guidelines prohibit an extension for more than one (1) year, either on a singular or aggregated basis. Thus, it is not accurate to say that Security and Janitorial Services contracts may be extended by entering into a MYC.

[T]here is no distinction on the application of MYOA by reason of the regularity of an annual appropriation for a project. What is clear in said Circulars is that MYCs which require a MYOA are those that take more than one (1) year to complete and require multi-year appropriations. Thus, if the duration of a contract for Security or Janitorial Services is more than one (1) year and will require multi-year appropriations, a MYOA is necessary regardless of the fact that such projects are regularly included in the appropriations. Notwithstanding this position, an inquiry with the DBM is a prudent option for an authoritative and definitive interpretation of the provisions of the subject Circulars.