Informs contractor that contract performance is contingent on funds availability.
Applicability: Applies to all contracts where funding is subject to Congressional appropriation.
Key Requirements
Understand that government contract obligation depends on fiscal year appropriations
Be aware that contract can be terminated if funds are not appropriated
Plan cash flow recognizing potential funding gaps between fiscal years
Maintain communication with CO regarding funding status
Common Issues & Pitfalls
Not budgeting for potential contract suspensions due to continuing resolutions
Assuming contract will continue at same pace across fiscal years
Not planning for government shutdown impacts on contract work
Failing to adjust staffing when contract work is suspended
Contractor Guidance for Your Bid
Federal funding is unpredictable. Continuing resolutions, government shutdowns, and budgetary freezes affect contract performance. Build financial flexibility into your plan—don't staff up for full performance immediately. Maintain regular communication with your Contracting Officer about funding status, especially near fiscal year-end (September 30).
Related FAR Clauses
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