# Presentation: 035515

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

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

**Commandment #1**
***“******Don’t spend dollars you don’t 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 don’t, then we need to have requested Bridge Funding to cover those costs**

## 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 doesn’t 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.**

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

**When we don’t 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**

## 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@lbl.gov](mailto:AESchiller@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**

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

**An estimate is an estimate –**
**You can’t 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**

## 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

## 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 - **