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FFP contract thats severable

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  • 3 weeks later...

The GAO Red Book Chapter 5 Annual update contains this, on page 5-1:

 A multiple year appropriation is available by its very terms for the bona fide needs of the agency arising during that multiple year period. Consequently, an agency using a multiple year appropriation would not violate the bona fide needs rule, discussed in more detail in section B of this chapter, if it enters into a severable services contract for more than one year as long as the period of contract performance does not exceed the period of availability of the multiple year appropriation. B-317636, Apr. 21, 2009.

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It depends.  A few possibilities...

Do you want to extend the period of performance to allow the contractor to overcome its failure to perform timely, as an alternative to termination for default or cause?  Yes, you may do this as matter of professional discretion, and hopefully with some exchange of consideration.

Do you want to extend the period of performance as part of an equitable adjustment under the Changes clause, Government Property clause, or a similar clause?  Yes, you may do this as a matter of contract administration and fairness.

Do you want to extend the period of performance because the contractor has completed the work but there are unspent funds, and you want to allow the contractor to collect those funds by doing more work?  Well, this one is harder to justify.

It depends.

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On 1/3/2024 at 4:52 PM, Birdsong said:

I have a FFP contract that has procurement funding and is severable. Can the period of performance be extended beyond 12 months?

The DoD PROC funds are multi-year funds available for obligation for three years (5 years for ship and aircraft outfitting, etc.), correct?

Adding scope to an existing contract might or might not require out of scope justification. But in-scope mods extending the time to meet the scope of the contract would seem to be allowable. What is the purpose of the contract and the extension?

See, for example, https://www.dau.edu/acquipedia-article/procurement-funds#:~:text=The Procurement appropriation is used,for operational use or inventory.


We used PROC funds from multiple appropriation years for the acquisition,  installation and systemization, training, etc. of process equipment for Chemical Weapons Demilitarization (Chem-Demil) Plants during and after construction of those plants under the decades long Chem-Demil Program.

The Chem-Demil Program was a Major Defense Program, with Systems Contracts (Services with Construction or design-build phases) for nine plants at separate locations in the US and Johnson Island and one plant in Russia for the Russian Federation.

Each plant used multipke funding types (e.g., PROC, MILCON, Army and DoD O&M, etc.

The Process Equipment for the majority of the plants was Government Furnished, under multiple contracts and installed by the Systems Contractors..

(Some plants were design-bid-build, systemization, pilot ops, operations, closure phases. Other plants used Design-Build in-lieu of government furnished design. There was a mix of Cost Plus and FFP used.)

Some Systems contracts were simply phased, others were single award, task order, ID/IQ.


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