Under which regulation does it require each CLIN to be incrementally funded at time of award?
Making the assumption this effort is already negotiated if not awarded.
In our research, we could not find any regulation that addresses your specific question. However, for a contract to be binding there has to be agreement between the parties on the terms and conditions of the contract. Delivery schedule is one of those elements. If you have severable service CLINs established that are based on the effort beginning at the time of award, are unable to fund those CLINs at award and haven’t provided prior notice of that possibility, then you are on shaky ground. The Contractor has based their estimated costs for these services on the terms and conditions (delivery schedule) established in the contract. Had you been aware of the possibility that you might not be able to fund at award, you could have established options or make the effort subject to availability of funds, if applicable. (See FAR 32.706-1 Clauses for contracting in advance of funds.)
If you can get the contractor to agree, you can modify the contract to incorporate a new delivery schedule for beginning the services of the unfunded CLINs if you know when funding will be available. If you know you’ll be getting the funding but don’t know exactly when, the Contractor may agree to some sort of “Subject to Availability of Funding” type language contained in FAR 52.232-18 as a guide for those CLINs.
If at this point you don’t think you’ll get funding for those CLINs, you should pursue a partial No Cost Termination for those CLINs (see FAR 49.603-7 No-cost settlement agreement-partial termination.)
You should definitely seek the advice of legal counsel prior to taking any of actions above.