Is there a percentage rule for the amount of funds the can be added to a contract through the use of a modification before the modification is considered "out of Scope"? Is there any regulatoion that supports this position?
There is no such thing as "out of scope" when it comes to funding. "Out of scope" deals specifically with the statement of work or statement of objectives or performance work statement.
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There is no regulation that specifies a percentage rule for the amount of funds that can be added to a contract.