Attachment_6_-_PBGC_Directive_FM_15-02_Obligating_Procedures_for_PBGC_Requirements.pdf

Pension Benefit Guaranty CCorporation

Ordder

Directive NNumber: FMM 15-2

Effective DDate: 07/02//12 Originnator: Procurement DDept

Alice C. MMaroni Chief Mannagement OOfficer

1. PURPPOSE: Thiis Order estabblishes and explains the pprocurement pprocedures thhat will be ussed in the prrocessing of oobligations aand paymentss in the Pensiion Benefit GGuaranty Corrporation (PBBGC).

2. CANNCELLATIOON: This Orrder replacess Order FM 115-2, Obligatting Proceduures for PBGCC

Procuurements, datted 9/18/07.

3. SCOPPE: This OOrder applies to all PBGC employees wwith the exceeption of the Office of thee

Inspeector Generall (OIG), whicch has its ownn statutory auuthority.

4. AUTHORITY: This Order i s issued in coompliance wiith the Unitedd States Code (U.S.C), Feederal

Acquuisition Regullation (FAR)), and PBGC Directives FFM 15-1, Reqquisition, Acqquisition andd Paymment for Goodds and Servicces, and PM 225-5, Selectioon, Appointmment, trainingg and Manageement of Coontracting Offfficer Techniccal Represenntatives (COTTRs) and Tassk Monitors ((TMs).

5. BACKGROUNDD: All PBGCC funds are aapportioned bby the Officee of Managemment and Buddget

(OMBB). The appportionment rrepresents PBBGC's authorrity to obligaate monies froom revolvingg fundss. Exceedingg the total appportionmentt may violate the Anti-Deeficiency Actt, and the amoount apporrtioned to PBBGC in a fisc al year may bbe used for oobligations prroperly incurrred in that fiiscal year oonly. This OOrder includees the criteriaa for determinning which fiiscal year's obbligating authhority shoulld be chargedd, an explanation of what constitutes aa valid obligaation, a descrription of actiions takenn at the end off each fiscal yyear, a descriiption of howw obligations are recorded d, and a descriiption of howw adjustmennts are made.

6. DEFIINITIONS:

a. OObligation. A definite coommitment bby the governnment to spennd apportionned funds. AA biinding contraact is an obliggation. Obliggations may nnot be made prior to receiving the appportioned fuunds. The fofollowing typ es of obligat tions are not covered in thhis order:

(1) Payroll – See PM 05-12, PBGC Position Management Policy

(2) Purchase Card Requests—See PBGC Purchase Card Manual

(3) Training Requests--See PBGC Order PM 25-2, Training Policy and Procedures

(4) Travel--See PBGC Order GA 10-5, PBGC Travel Policies and Procedures

b. Contract. A mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all written commitments that obligate PBGC to an expenditure of apportioned funds. The term “contract” includes: letter contracts, purchase orders, Indefinite Delivery/Indefinite Quantity (ID/IQ) contracts, delivery/task orders, interagency agreements, and Blanket Purchase Agreement (BPA) call orders.

c. Blanket Purchase Agreement (BPA). A BPA is a written instrument of understanding, negotiated between an agency and a contractor, which contains (1) terms and clauses applying to future contracts (call orders) between the parties during its term, (2) a description, as specific as practicable, of supplies or services to be provided, and (3) methods for pricing, issuing, and delivering future call orders under the BPA. A BPA is not a contract, and funds are not obligated until a specific call order is placed against the BPA.

d. Contract Modification. A contract modification is any written change in the terms of the contract. Contract modifications shall only be issued by authorized Contracting Officers, and may increase or decrease the amounts obligated in the original contract.

7. GENERAL POLICY:

a. PD will deliver on a timely basis the best value product or service to the PBGC, while maintaining the public’s trust and fulfilling public policy objectives. Participants in the acquisition process should work together as a team and should be empowered to make decisions within their area of responsibility.

b. The FAR governs the PBGC’s procurement activities. Nothing in this Order is intended or shall be construed as detracting from, limiting, precluding the use of, or otherwise compromising any right, power, or authority available to the PBGC under the FAR or other law, rule, or regulation.

8. RESPONSIBILITIES:

a. The PD Director appoints Contracting Officers through the issuance of a Contracting Officer’s Warrant with the duties and responsibilities delineated in FAR 1.6.

b. The Financial Operations Department (FOD) Director, through the General Accounting Branch (GAB) in the Controller Operations Division, will:

(1) Receive, review, and process invoices;

(2) Calculate and include interest payment, if applicable;

(3) Verify and reconcile obligation balances.

c. The Chief Information Officer (CIO) or designee will act as the agent on behalf of the agency with respect to receiving and certifying that IT equipment; and

d. The FASD Director or designee will receive and deliver all goods for the agency.

9. PROCEDURES:

a. Fiscal Year Constraints.

(1) Bona Fide Needs Rule. The law requires apportioned funds be obligated in the fiscal year in which the need for the goods or services arises.

(2) End of Fiscal Year. At the end of each fiscal year, all outstanding obligating documents will be reviewed to determine if there are any balances that can be deobligated. The remaining obligated balances, supported by documentation, will consist of undelivered orders and accounts payable. These obligated balances are carried over until the final invoice is received. Any unobligated apportionment authority expires at the end of the fiscal year unless the apportionment is open-ended.

(3) Contracts crossing fiscal years. PBGC may enter into a contract, exercise an option, or place an order under a contract for a period that begins in one fiscal year and ends in the next fiscal year if the period of the contract awarded, option exercised, or order placed does not exceed one year (41 USC 253L). Funds made available for a fiscal year may be obligated, for the total amount of an action entered into under this authority, at any time during that fiscal year.

b. Obligation Process.

(1) Overview. The obligation process begins when obligating authority is made available through the budget process. The obligating authority becomes a resource by which PBGC Departments can carry out their missions. Specific needs for those resources are identified through the requisition procedure (see PBGC Order FM 15-1). Based upon a valid Procurement Requisition, the Contracting Officer will issue an obligating document (e.g. contract, or modification to a previously issued contract). The Contracting Officer will indicate the amount of funds to be obligated and the name of the Contracting Officer’s Representative (COR), or technical point of contact.

(2) Distribution of Obligating Documents by PD. Executed obligating documents will be distributed electronically to the following parties:

(a) The contractor.

(b) GAB.

(c) The COR.

(d) The originating department’s Budget Liaison Officer (BLO).

(e) The Budget and Organizational Performance Department (BOPD).

(f) Receiving copy of purchase order to Facilities and Services Department (FASD) for supplies.

(3) Recording of Obligations. All obligating documents issued by PD will be made available to GAB within one business day. PD, using Comprizon, will post the obligation in the Consolidated Financial System (CFS). If an obligation is issued by PD for LESS THAN the amount of the requisition, CFS will automatically de-commit the unobligated amount and return funds to funds control. The obligating document will be filed by GAB in vendor contract number sequence.

(4) Modification to Obligations. A requisition must be used to initiate an action to increase or decrease an obligation. The requisition will be sent through GAB to PD.

The requesting department is notified of the change when it receives a copy of the obligating document from PD. If an obligation is issued by PD for LESS THAN the amount of the requisition, CFS will automatically de-commit the unobligated amount and return funds to funds control.

c. Acceptance.

(1) Acceptance of Goods and Services.

(a) FASD will receive goods for the departments and maintain a log of all deliveries.

FASD will then deliver the goods to the ordering department within one business day for acceptance or rejection.

(b) It is the originating department's responsibility, with the exception of IT equipment, to accept or reject goods and services received. It is also the originating department's responsibility to identify damaged or unacceptable goods or services, with the exception of IT equipment, within 10 workdays of receipt and notify PD to initiate corrective action.

(2) Acceptance of IT Equipment. The Office of Information Technology (OIT) acts as the agent on behalf of the agency with respect to receiving and certifying that IT equipment is operational. OIT will burn-in and certify equipment in accordance with established burn-in policies and procedures. Burn-in is that process by which components of a system are tested for a prescribed period of time to find defects prior to being placed in service. Certification of equipment will be performed within 30 calendar days of OIT's receipt (unless the departments involved agree to different time frames). Any defective equipment failing the certification will be returned to the manufacturer under normal warranty maintenance agreements. OIT will be responsible for notifying PD and the Technical Point of Contact (TPOC) that the equipment is being returned to the vendor. The OIT Asset Management staff will contact the vendor to obtain a Return Merchandise Authorization (RMA).

The following procedure for IT equipment receipt and acceptance/rejection shall be followed:

(a) OIT signs the FASD receiving log for all PBGC PCLAN related equipment and software and FASD moves it to the OIT secured Burn-in Storage Facility.

(b) Within 24 hours of receipt of IT equipment, OIT is responsible for filling out a Technical Assistance Request (TAR) form on behalf of the TPOC.

(c) Within 72 hours, the OIT computer specialist assigned to the TAR, notifies the TPOC to coordinate and schedule the installation and/or distribution of the goods received.

(d) A user evaluation/acceptance form is signed by the TPOC and is maintained in the OIT inventory file for that particular personal computer configuration.

d. Processing Invoices. When goods are received or services are rendered, the vendor will submit an invoice to PBGC in order to receive payment. The obligating document directs the vendor to send invoices for all services and tangible goods to GAB. Upon receipt, invoices are reviewed by GAB to determine if the invoice is proper for processing (see below for the six elements of a proper invoice). If GAB determines an invoice is improper, GAB will send the improper invoice to the COR and inform the COR, noting the improper items as listed below.

Proper invoices are date stamped, scanned into the Image Processing System (IPS), and forwarded to the COR via CFS Workflow for approval or rejection.

(1) A Proper Invoice. The following information, when correct, constitutes a proper invoice and is required as payment documentation:

(a) Name of contractor and invoice date (contractors are encouraged to date invoices as close as possible to the date of mailing or transmission);

(b) Contract number, or other authorization for delivery of property or services (assignment of an invoice number by the contractor is recommended);

(c) Description, price and quantity of property and services actually delivered or rendered;

(d) Shipping and payment terms;

(e) Other substantiating documentation or information as required by the contract;

(f) Name, title, telephone number and complete mailing address of responsible official to whom payment is to be sent.

(2) Approval of Invoice. GAB date stamps the invoice, scans it into the IPS, and forwards it to the COR via CFS Workflow. After accepting the deliverable in accordance with paragraph 9.c above, and checking to ensure that the invoice is proper for payment in accordance with paragraph 9.d(3) above, the COR approves the invoice with their electronic signature.

(3) Invoice Is Not Proper. If the invoice is not proper, the COR has the responsibility to notify the contractor in writing within seven (7) calendar days of PBGC's receipt of the invoice (date stamped on invoice by GAB), identifying what the problem is with the invoice. The COR may use the “PBGC Invoice Rejection Notice to Contractor Letter” (Attachment 1), or by e-mail using similar language.

(4) Invoice is Proper. If the invoice is proper for payment, the COR approves the invoice in CFS with electronic signature. The COR’s supervisor has the responsibility to ensure that invoice processing by the COR is accomplished.

(5) Final Invoice. After the COR approves the final invoice, the COR reviews their CFS COR report to determine if unliquidated balances can be deobligated. If there are unliquidated balances, the COR initiates the deobligation requisition within Comprizon. The requisition will be sent through GAB to PD. PD will then deobligate the funds by completing a contract modification and will post the deobligation, through Comprizon, into CFS.

(6) Prompt Payment Act Considerations. Government acceptance is deemed to occur constructively on the 7th calendar day after the contractor delivers supplies or performs services in accordance with the terms and conditions of the contract, unless there is a disagreement over quantity, quality, or contractor compliance with a contract requirement. GAB will, when appropriate, calculate and include in the payment any applicable late payment interest penalty, and this will be charged directly to the purchasing cost center. Interest shall accrue upon invoices that have not been paid 30 days after the receipt of a properly payable invoice.

e. Reconciliation of Obligations. On a quarterly basis and upon completion of the contract, the departments will print from CFS a COR report listing obligations along with all recorded liquidations. The departments will identify any inconsistencies between CFS COR report and recorded obligations to GAB and PD. Any amounts to be deobligated shall be initiated by submitting a deobligation requisition in Comprizon. The requisition will be sent through GAB to PD. PD will then deobligate the funds by completing a contract modification and will post the deobligation, through Comprizon, into CFS.

Attachment 1: PBGC Invoice Rejection Notice to Contractor

Date:

Contract #:

Dear Customer Service Representative:

Your invoice No. dated / / Does not comply with the requirements of the Prompt Payment Act of 1982, as amended. We are returning the invoice to be corrected.

The following information must be supplied before the invoice will be processed:

[Tailor as necessary leaving only the applicable information.]

(1) Name of contractor and invoice date (contractors are encouraged to date invoices as close as possible to the date of mailing or transmission);

(2) Contract number, or other authorization for delivery of property or services (assignment of an invoice number by the contractor is recommended);

(3) Description, price and quantity of property and services actually delivered or rendered;

(4) Shipping and payment terms;

(5) Other substantiating documentation or information as required by the contract.

(6) Name, title, telephone number and complete mailing address of responsible official to whom payment is to be sent.

Please correct your invoice and return it to us as soon as possible so that we may process payment.

Send corrected invoice to invoicemanager@pbgc.gov.

Sincerely, Enclosure(s) mailto:invoicemanager@pbgc.gov