does not relate to a bona fide need of the fiscal year in which the funds were appropriated.
Generally, a bona fide need is determined by when the government actually requires the supplies being acquired. An agency must generally obligate the fiscal year in which the supplies will be used. Betty F. Leatherman, Department of Commerce, B-156161, 44 Comp. Gen. 695 (1965); Chairman, United States Atomic Energy Commission, B-130815, 37 Comp. Gen. 155 (1957). An agency may not obligate funds in one fiscal year where there will be no need for the supplies until the following fiscal year. To the Director, FGMS Division, B-95136, 61 Comp. Gen. 184 (1972).
There are however, two recognized exceptions to this rule: the lead-time exception and the stock-level exception. DOD 7000.14-R, vol.3, para. 080303; DFAS-DE 7000-4, para. 4c(1).
Under the lead-time exception, the bona fide need rule is not violated where materials cannot be obtained in the same fiscal year in which they are needed and contracted for because of the delivery time necessary to obtain them. However, the time intervening between contracting and delivery cannot be excessive and the procurement cannot be for standard commercial items readily available from other sources. Administrator, General Services Agency, B-138574, 38 Comp. Gen. 628, 630 (1959). The lead-time exception also includes supplies that cannot be obtained until following fiscal year due to the production lead-time necessary to produce them. 37 Comp. Gen. at 159. The stock-level exception permits an agency to purchase supplies in one fiscal year that will not be used until the following fiscal year in order to maintain adequate and normal stock levels. DFAS-DE 7000-4, para. 4c(1). However, fiscal year-end stockpiling of supplies in excess of normal usage requirements is prohibited. Mr. H.V. Higley, B-134277, Dec. 18, 1957.
Generally, a bona fide need for services does not arise until the services are rendered. EPA Level of Effort Contracts, B-214597, 65 Comp. Gen. 154 (1985). For purposes of properly funding service contracts, there is a distinction between those in which the services are severable and those in which they are nonseverable. A service is nonseverable if the service produces a single task or product that cannot be subdivided for separate performance in different fiscal years. Proper Appropriation to Charge Expenses Relating to Nonseverable Training Course, B-238940, 70 Comp. Gen.296 (1991); To H. B. Herms, Department of Agriculture, B-37929, 23 Comp. Gen. 370 (1943). In such cases, the agency must fund the entire effort with current funds at the time the contract is executed and contract performance may cross fiscal years. A service is severable if it can be separated into components that independently meet a separate need of the government. As a general rule, severable services are a bona fide need of the fiscal year in which the services are performed. Incremental Funding of Multiyear Contracts, B-241415, 71 Comp. Gen. 428 (1992). Generally, severable contracts may not cross fiscal years and an agency must fund them with funds available for the year in which the services are performed. However, a statutory exception now permits DoD agencies (and the Coast Guard) to use funds current at the time of award to finance any severable service contract for a period of performance that does not exceed one year. 10 U.S.C. 2410a.
ITMRA defines the term "information technology" with respect to an executive agency as “any equipment or interconnected system or subsystem of equipment, that is used in the automatic acquisition, storage, manipulation, management, movement,