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An additional approval may also be required if federal grant funds are used
toward a sole source procurement. The governmental agency must comply
with the specific grant terms and conditions, but in general it must justify its
proposed course of action based on the expertise, management, and respon-
siveness of the vendor and knowledge of the engagement, experience, and
uniqueness of the vendor. The federal grant funds may also cap the daily
amount payable to a vendor without prior written approval from the federal
agency.

9.6.2.2 Time Frame in Which the Funds Are Available for Expenditure
Without addressing the technical aspects of governmental budgeting, it can be
stated that funds are not available for indefinite periods of time and affirma-
tive action may be necessary to make the funds available. Grant funds are gen-
erally only available for a specific period of time, and if not spent before the
end of that period, the funds are returned to the granting agency. While it may
be possible to extend the period in which the grant funds can be spent, it
cannot be assumed that an extension will be granted. A few years ago, for
example, many governmental agencies were caught off guard when the federal
government declined to extend the availability of grant funds distributed under
the Local Law Enforcement Block Grant Program.
The planning stages should include discussions with the financial and grants
offices to ensure understanding of the actions required to obligate grant funds
and the time period to actually spend the funds. For example, issuance of a
purchase order obligates the funds, but the product or services need to be both
received and accepted before the end of the liquidation period. (A more
detailed discussion on obligating and expending the funds can be found in the
U.S. Department of Justice Office of Justice Assistance Financial Guidelines,
available at http://www.ojp.usdoj.gov/FinGuide/part3-ch2.htm.)
The availability of funds is relevant to the time period for System delivery
and implementation and heavily factors into development of the payment struc-
ture and consideration of the ramifications of schedule slip or difficulties
encountered in the acceptance testing process. For example, an agency needs
to consider what will transpire if the commodity or service is not accepted
before the end of the liquidation period.

9.6.2.3 Restrictions/Limitations on Permissible Scope of Expenditures
When a governmental agency applies for and receives a grant, it is usually for
a specific purpose or project, which necessarily limits the permissible scope of
expenditures. However, many grants contain additional spending restrictions
that are not as readily identifiable, but that could greatly impact an AFIS pro-
curement. For example, as part of the federal grant application process, an