Procurement Information Circular

April 30, 2003




PURPOSE:  To emphasize the forward funding policy to Agency procurement personnel.


BACKGROUND:  Since the Federal Government’s ongoing operations are contingent on the annual congressional appropriations, NASA faces certain budgeting challenges.  One such challenge is to continue funding operations during the period when the Congress and President have not finalized the Agency’s appropriations.  NASA uses a fundamental tool of the Federal budget process, known as forward funding, to safeguard against funding shortfalls during those periods.  Forward funding (1) sets aside certain funds for new obligations and/or planned Agency expenses and (2) consists of the total of unobligated budget authority and uncosted obligations.  Forward funding can also decrease the amount of administrative and procurement actions related to incremental funding, thereby decreasing the potential for delays in contract/procurement activities.


It is important that management monitor forward funding balances to fully understand the status of a program or project.  Large forward funding balances can indicate that research and development efforts, such as grants and cooperative agreements, have required more time to actually start work.  Large forward funding balances can also give the appearance that NASA is carrying over excessive balances from one fiscal year to the next. 


The NASA Office of the Inspector General recently completed a review of the Management of Forward Funding and Undisbursed Costs, which resulted in two recommendations.  The first recommendation requested the Chief Financial Officer (CFO) establish and implement a forward funding management policy.  The second requested the Assistant Administrator for Procurement to emphasize the forward funding policy to Agency procurement personnel.


GUIDANCE:  The full text of NASA’s Forward Funding Management Policy can be found in the NASA Financial Management Manual, FMM 9012.  In general, the policy states that Enterprises and Functional Offices will manage 2-year funds against Agency guidelines for uncosted obligations and unobligated balances at the program or project level as appropriate.  The policy provides thresholds as to what are considered reasonable unobligated and uncosted carryover.  Procurement personnel should review and become familiar with the forward funding policy.


EFFECTIVE DATE:  This PIC is effective as dated and shall remain in effect until canceled or superseded.


HEADQUARTERS CONTACT:  Lou Becker, Code HK, (202) 358-4593, e-mail: lou.becker@nasa.gov. 



R. Scott Thompson

Director, Contract Management Division