Advance Payment Requirement for Non-Federal Work for Others

1
Advance Payment Requirement for Non-Federal Work
for Others (WFO) Sponsors
Commandment 1 Dont spend dollars you dont
have Funding must be in the Contract, not just
in the Approved Funding Program (AFP) or contract
award For a Non-Federal Work for Others
Contract we need to have the cash in hand before
we can spend against it and if we dont, then
we need to have requested Bridge Funding to cover
those costs
2
Advance Payment Requirement for Non-Federal Work
for Others (WFO) Sponsors
As a federal contractor, DOE requires us to
maintain a 90 day cash balance during the life of
a Non-Federal Work for Others project. Although
the LBNL policy has been newly revised it doesnt
include a change in our basic process. The
purpose of updating the policy is to clarify the
requirements, the roles and responsibilities, and
to provide some examples to help you estimate
advances.
3
Advance Payment Requirement for Non-Federal Work
for Others (WFO) Sponsors

• When we dont receive an appropriate advance from
  the Sponsor we can end up in a negative cash
  position which ..
• Puts the institution at risk
• Eats away at available Bridge Funding
• May require a stop work

4
Advance Payment Requirement for Non-Federal Work
for Others (WFO) Sponsors

• State and Local governments that are precluded by
  law from providing an advance are excepted from
  this policy but those exceptions must be
  reviewed and approved by the Budget Office
• Anastasia Schiller AESchiller_at_lbl.gov x4273
• The calculated advance should be at least equal
  to the sum of the 4 highest months of estimated
  cost including any equipment or one time start up
  costs
• A full advance is required for proposals with a
  proposed budget of 25K or less or that will be
  completed in 90 days or less

5
Advance Payment Requirement for Non-Federal Work
for Others (WFO) Sponsors
An estimate is an estimate You cant always
predict exactly what costs will be incurred each
month We have a responsibility to make the best
estimate we can based on the information we have
and if information is lacking err on the
conservative side
6
Advance Payment Requirement for Non-Federal Work
for Others (WFO) Sponsors

• Calculation Approaches
• Straight-line Advance (Total Cost/Total of
  months) 4
• - Flat Project Burn Rate
• - Erratic Project Burn Rate where monthly costs
  are unknown and high start up or large single
  purchase costs are not expected
• Modified Straight-line Advanced ((Total cost
  start-up costs and/or large purchase)/Total of
  months 4) start-up costs and/or large
  purchase
• - Flat Project Burn Rate with high start up
  costs and/or a large purchase
• - Erratic Project Burn Rate where monthly costs
  are unknown and high start up or large single
  purchase costs are expected

7
Advance Payment Requirement for Non-Federal Work
for Others (WFO) Sponsors

• Calculation Approaches
• Known Costing Profile Advance 1st Highest
  Month 2nd Highest Month 3rd Highest Month
  4th Highest Month
• -Erratic Project Burn Rate where monthly
  projection of cost is known (including start-up
  costs and /or large purchases)
• If the original advance is insufficient we may
  need to go back to the Sponsor and renegotiate an
  additional advance
• Where can I go for help?
• Field Operations
• Sponsored Projects
• Budget Office -