$700,000 was committed in January for a Procurement-funded contract to be awarde

Question

$700,000 was committed in January for a Procurement-funded contract to be awarded in June. Thanks to healthy competition, the Procuring Contracting Officer was able to accept a bid of $500,000 for the work. According to the rules governing commitments: (select one)

A $700,000 obligation must be recorded The extra $200,000 from the original commitment can be decommitted in the same transaction that records the $500,000 obligation The original commitment amount must be decreased by $200,000 for 90 days prior to the obligation being recorded The extra $200,000 from the original commitment remains committed until the appropriation expires

Explanation / Answer

The extra $200,000 from the original commitment can be decommitted in the same transaction that records the $500,000 obligation. As the money has to be debited in the books of accounts.

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