Design Fee – A&E Statutes
A&E contract for whatever services it may have included, not just production and delivery. 46 Comp. Gen. 573 (1966) (41 U.S.C. § 254(b)); 46 Comp. Gen. 556, 564–65 (1966) (10 U.S.C. § 2306(d)).The view expressed in B-205793, Jan. 18, 1982,is consistent with the Federal Acquisition Regulation, which provides: “For architect-engineer services for public works or utilities, the contract price or the estimated cost and fee for production and delivery of designs, plans, drawings, and specifications shall not exceed 6 percent of the estimated cost of construction of the public work or utility, excluding fees.” 48 C.F.R. § 15.404-4(c)(4)(B).
If construction were governed solely by the appropriated funding requirement in 41 U.S.C. § 12, the funding process would be cumbersome and would afford little flexibility. While 41 U.S.C. § 12 remains the cornerstone of congressional control of major construction projects, Congress has enacted various supplemental provisions for agencies with ongoing construction responsibilities,all of which can be viewed as exceptions to 41 U.S.C. § 12.
Not surprisingly,the most detailed and comprehensive scheme is that applicable to the Defense Department and the military departments. Typically, construction funds are appropriated to each department in a lump sum to be used “as authorized by law,” which means in accordance with authorization acts required by 10 U.S.C. § 114(a)(6). Most of the funds are authorized by installation, in line-item format. In addition, each department receives a lump-sum authorization for “unspecified minor military construction projects.” Substantive provisions are found in the Military Construction Codification Act, codified chiefly in 10 U.S.C. §§ 2801–2853. “Military construction” is defined broadly as “any construction, development, conversion, or extension of any kind carried out with respect to a military installation, whether to satisfy temporary or permanent requirements.” 10 U.S.C. § 2801(a). A “military construction project” includes all military construction “necessary to produce a complete and usable facility or a complete and usable improvement to anexisting facility” or authorized portion thereof. 10 U.S.C. § 2801(b). Under 10 U.S.C. § 2805(a)(1), “within anamount equal to 125 percent of the amount authorized by law for such purpose — that is, the lump-sum minor military construction authorization — each department may carry out “unspecified minor military construction projects” that are “not otherwise authorized by law.”
A construction project is defined in terms of a “complete and usable facility” unless something less is specifically authorized. It is not permissible to split a single project into smaller projects (sometimes given the fancy name “incremental construction”) in order to stay below the ceiling for using O&M funds. B-234326.15, Dec. 24, 1991; B-213137, Jan. 30, 1986; B-159451, Sept. 3, 1969; B-133316-O.M., Aug. 27, 1962. As most of these references point out, directives of the military departments also prohibit splitting.
The Department of the Army is authorized to procure A&E services “for producing and delivering designs, plans, drawings, and specifications needed for any public works or utilities project of the Department.” 10 U.S.C. § 4540(a). Section 4540(b) then provides: “The fee for any service under this section may not be more than 6 percent of the estimated cost, as determined by the Secretary, of the project to which it applies.” Nearly identical limitations exist for the Navy (10 U.S.C. § 7212(b)) and the Air Force (10 U.S.C. § 9540(b)).
About Continuing Contracts
Under a continuing contract, as the termis used in this context, the Corps enters into a multiyear contract for the completion of a construction project, although funds are soughtand appropriated only in annual increments to cover work planned for the particular year. See C.H. Leavell & Co. v. United States,530 F.2d 878, 886 (Ct. Cl. 1976). Thisstatute is an exception to both 41 U.S.C. § 12 and the Antideficiency Act. It authorizes the Corps to record the full contract price as an obligation at thetime the contract is entered into, even though appropriations to liquidate the obligation have not yet been made. 56 Comp. Gen. 437 (1977).The authority of 33 U.S.C. § 621 applies equally to contracts financed by the Civil Works Revolving Fund (33 U.S.C. § 576). B-242974.6-O.M., Nov. 26, 1991.
To the extent applicable, the laws relating to river and harbor improvements — including the “continuingcontract” authority of 33 U.S.C. § 621 — apply also to the Corps’ shore protection and flood control projects.33 U.S.C. §§ 426b, 701. A different type of continuing contractis authorized by a provision found in the Reclamation Act, 43 U.S.C. § 388.