Does a modification need to be done to deobligate the FY18 money that will not be used by Sept 30? And then another modification to the DO to add funding for FY19 to fund the rest of the period?
Are there any exceptions to the FMR?
This assumes that the contract was funded with US appropriated annual funding
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FAR 32.703-3 addresses contracts that are funded with annual appropriations that cross fiscal years.
(a) A contract that is funded by annual appropriations may not cross fiscal years, except in accordance with statutory authorization (e.g., 41 U.S.C. 6302, 31 U.S.C. 1308, 42 U.S.C. 2459a, 42 U.S.C. 3515, and paragraph (b) of this subsection), or when the contract calls for an end product that cannot feasibly be subdivided for separate performance in each fiscal year (e.g., contracts for expert or consultant services).
31 USC §1308 shown above is the exception for telephone and utility services (metered)
Charges for telephone and metered services (such as gas, electricity, water, and steam) for a time period beginning in one fiscal year or allotment period and ending in another fiscal year or allotment period may be charged against the appropriation or allotment current at the end of the time period covered by the service.
FMR Vol 3 Chapter 8 081307 that you referenced above states the charges for utility services and communications for a time period beginning in one fiscal year and ending in another fiscal year must be charged against the appropriation current at the end of the time period covered by the service.
There is no authority that allows you to fund metered utilities in advance. Based on the information that you provided in the original question, it seems an action will have to be taken to deobligate the FY18 funding that is currently on contract to cover the FY19 utilities, and FY19 funding will have to added to cover the FY19 utilities It is recommended that you talk to your local Comptroller or Legal department for guidance prior to modifying the contract.