3101  Overview

This chapter establishes the Department of Veterans Affairs’ (VA) financial policies for the obligation of monetary awards related to prize competitions.

Key points covered in this chapter include:

• The Secretary may authorize contests with the award of prizes to stimulate innovation with the potential to advance VA’s mission;
• VA may use appropriated funds for prize competition monetary awards subject to the limitations under 15 U.S.C. § 3719;
• Prior to obligating funds, VA’s Office of General Counsel (OGC) must confirm the nature of the competition and awards proposed meet Purpose Statute requirement under 31 U.S.C. § 1301; and
• Use of a miscellaneous vendor code is not permitted for prize competition award obligations; recipients must be individually vendorized.

3102 Revisions

Section	Revision	Office	Reason for Change	Effective Date
Various	New policy	OFP	Reorganized chapters	April 2026

3103 Definitions

Obligation – A legally binding agreement that will result in outlays, immediately or in the future. An obligation is a legal liability of the Government against an available appropriation.

Non-Contractual Obligation – Obligations with special statutory authority or other regulatory authority to exempt the obligation from Federal Acquisition Regulations (FAR). There are instances where these obligations may be generally defined as a contract (agreement between two parties), but these obligations do not follow FAR-based procedures.

3104  Roles and Responsibilities

Office of General Counsel (OGC) is responsible for determining whether the nature of a competition and awards proposed meet the Purpose Statute requirement in 31 U.S.C. § 1301.

Administration and Staff Office Chief Financial Officers (CFOs) are responsible for ensuring the proper processing of prize competition obligations in accordance with the guidelines in this policy.

Prize Competition Director is responsible for gathering and compiling data from those VA offices sponsoring prize competitions and for consolidated annual reporting to Congress.

3105  Policies

310501 General Policies

1. In accordance with 15 U.S.C. § 3719, the Secretary may authorize contests to stimulate innovation with the potential to advance VA’s mission. The contests may involve the award of monetary prizes.
2. In accordance with 15 U.S.C. 3719, the VA Secretary will approve prize competitions valued at over $1 million, and may issue a written delegation of authority for management of competitions with total prizes valued at or under $1 million.
3. When donated funds are intended for prize competition awards, Veterans Health Administration (VHA) offices will follow guidance in VHA Directive 4721, generally deferring to the facility Center for Development and Civic Engagement (CDCE) Program Manager to determine acceptance criteria for the donation. Administration and Staff Office donations must be reviewed by OGC Gifts/Donations via email at VAOGCBenefitsLawGroupSupervisors@VA.gov.
4. Prior to announcing the competition, VA’s Office of General Counsel (OGC) must confirm the nature of the competition and awards proposed meet the Purpose Statute under 31 U.S.C. § 1301 for the appropriation referenced. Following OGC confirmation that the nature of the competition and awards proposed meet the Purpose Statute, local finance offices will reserve funds in the accounting system (via FRR document in the integrated Financial and Acquisitions Management System (iFAMS) or VA Form 2237 in Integrated Funds Control, Acquisition, and Procurement (IFCAP) system supporting the Financial Management System.
5. Local finance office staff will monitor and adjust funding reservations as needed through completion of the contest and selection of prize winners.
6. VA will record the obligation upon approval and announcement of the prize winner(s).
7. The amount recorded on the obligation is the amount allowed for the winner(s) under prize competition rules.
8. In accordance with 31 U.S.C. § 1501, VA will properly document the prize competition monetary award. Documentation will include at a minimum the authorizing official’s approval of the prize competition listing the number and amounts of projected prizes and OGC’s required confirmation that the contest and awards comply with the Purpose Statute.
9. Documentation supporting the prize competition obligation will be maintained in accordance with National Archives and Records Administration General Records Schedule (NARA GRS) Financial Management and Reporting Records.
10. Administrators of a prize competition will comply with restrictions identified in 15 U.S.C. § 3719, working with the designated agency Prize Competition Director to consolidate and report on all prize competitions annually, and to provide notice to the relevant House and Senate committees at least 30 days prior to issuing prize funds exceeding $50 million.
11. Not later than March 1 of each year, the Prize Competition Director shall submit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science and Technology of the House of Representatives a report on the prize competition activities carried out during the preceding fiscal year.
12. Recipients of the prize competition awards will be individually vendorized; use of “Miscellaneous Vendor” is not permitted.
13. Obligations pursuant to this policy must follow the requirements for all government obligations established in Volume III, Chapter 2 – Obligations.

310502 Integrated Financial and Acquisition Management System (iFAMS)

1. VA will reserve funds in iFAMS for an authorized prize competition using a Funding Reservation Request (FRR).
2. When the competition closes and prize winners are identified, VA will use a non-contractual obligation, document type OSE (Standard Obligation (non-acquisitions obligation)) to record related obligations.
3. VA will use the payment document code, PAE (Enterprise Payment Authorization), upon approval of payment.

310503 Financial Management System (FMS)

1. VA will reserve funds for an approved prize competition using VA Form 2237.
2. VA will use VA Form 1358, sub-authority code A under approved use #20, to record a prize competition obligation in FMS once the recipient is identified.
3. Payment will be made to the recipient by electronic funds transfer (EFT).

3106 Authorities and References

• United States Codes (U.S.C.)
  • 15 U.S.C. § 3719, Prize competitions
  • 31 U.S.C. § 1301, Application (Purpose Statute)
  • 31 U.S.C. § 1501, Documentary Evidence Requirement for Government Obligations
• Federal Acquisition Regulation, 48 C.F.R. Chapter 1
• NARA GRS for Financial Management and Reporting Records
• VA Financial Policy
  • Volume III, Chapter 2 – Obligations
  • Volume III, Chapter 4 – 1358 Obligations
• VA Form 1358, Obligation or Change in Obligation
• VA Form 2237, Request, Turn-In, and Receipt for Property or Services
• VHA Publications
  • VHA Directive 4721, VHA General Post Funds – Gifts and Donations

3107 Rescissions

None.

Appendix A: Previous Policy Revisions

None.