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  • Question

    Can we fund the customer's portion of the firm fixed price contract for 7 months vs. the full year.


    Answer

    Does your customer want to provide incremental funding in anticipation of adding more funding later?  If so your answer lies in the DFARS. 
     
    DFARS 232.7 covers Contract Funding.  DFARS 232.702 indicates that fixed price contract shall be fully funded except as permitted by 232.703-1 states a “fixed price contract may be incrementally funded only if--
    (i)  The contract excluding any options or any exercises option –
    A.  Is for severable services;
    B.  Does not exceed on year in length; and
    C.  Is incrementally funded using funds available (unexpired) as of the date the funds are obligated; of
    (ii)  The contract uses funds available from multiple (two or more) fiscal years and—
    A.  The contract is funded with research and development appropriates; or
    B.  Congress has otherwise authorized incremental funding.”
     
    Your answer does not provide enough information for me to give a definitive yes or no answer.  Is it a task order contract?  Is the work R&D?  Is the work severable?   Are multiple fiscal years funding being used?  All of these questions would need to be answered in light of the above guidance in the DFARS to answer the question about the appropriateness of only funding 7 months vs 12 months.
     
    If the option period is for 12 months, why does the customer want to fund 7 months to avoid getting money back?  Will they only order 7 months of services due to the IDIQ capability you mention?  This could also imply that perhaps the services ordered on the contract are in excess of those needed to support the customer’s mission.  If this is the case, this may be more than a simple funding question and may actually require a change to the contract service levels and PWS (or task order) depending upon which clauses are in the contract.

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