Can we modify the solicitation to mirror the funding we have, or do we have to go request additional funds?
This response is based on the information provided. We suggest you discuss with your contracting team, program manager and/or legal department as appropriate.
We assume you are operating under the processes and procedures of FAR 8.405. We find nothing that precludes you from amending the RFQ before award.
You are correct that we cannot award without sufficient funding. If the full requirement is needed you would need to get additional funds before awarding. Your team chose to reduce quantities to get within available funding.
If you are operating under the processes and procedures of FAR part 13, you still have the ability to amend.
"FAR 13.004 Legal effect of quotations.
(c) If the Government issues an order resulting from a quotation, the Government may (by written notice to the supplier, at any time before acceptance occurs) withdraw, amend, or cancel its offer. (See 13.302-4 for procedures on termination or cancellation of purchase orders.)"