1. Can you change the type of Order once the order has been approved?
2. Is 12 month for a all severable contracts or only for O&M and RDT&E is for 24 months?
Changing an Economy Act order into a Project Order is within the purview of the Agency/Command and the process for doing so is usually governed by a local agency or Command policy and procedure, so you should talk to your Resource Management folks.
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You are mixing apples and oranges with funding types regarding severable versus non-severable services. The basic rule, regardless of funding type is that non-severable services must be fully funded at time of award; severable service contracts can generally be written for 5 years, with the severable services funded on an annual basis, typically via the exercise of options. As with most procurement and appropriation rules, there are some limited exceptions covering formal "multi-year" procurements and special rules when you cross fiscal years. Please consult with your Finance Office for clarifications.