[Code of Federal Regulations]

[Title 48, Volume 4]

[Revised as of October 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR332.703-1]



[Page 60]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

                  CHAPTER 3--HEALTH AND HUMAN SERVICES

 

PART 332_CONTRACT FINANCING--Table of Contents

 

                     Subpart 332.7_Contract Funding

 

Sec. 332.703-1  General.



    (b) The following general guidelines are applicable to incrementally 

funded contracts:

    (1) The estimated total cost of the project (all planned phases or 

increments) is to be taken into consideration when determining the 

requirements which must be met before entering into the contract; i.e., 

justification for noncompetitive acquisition, approval or award, etc.

    (2) The RFP and resultant contract are to include a statement of 

work which describes the total project covering the proposed multiple 

year period of performance and indicating timetables consistent with 

planned phases or increments and corresponding allotments of funds.

    (3) Offerors will be expected to respond to RFPs with technical and 

cost proposals for the entire project indicating distinct break-outs of 

the planned phases or increments, and the multiple year period of 

performance.

    (4) Negotiations will be conducted based upon the total project, 

including all planned phases or increments, and the multiple year period 

of performance.

    (5) Sufficient funds must be obligated under the basic contract to 

cover no less than the first year of performance, unless the contracting 

officer determines it is advantageous to the Government to fund the 

contract for a lesser period. In that event, the contracting officer 

shall ensure that the obligated funds are sufficient to cover a complete 

phase or increment of performance representing a material and measurable 

part of the total project, and the contract period shall be reduced 

accordingly.

    (6) Because of the magnitude of the scope of work and multiple year 

period of performance under an incrementally funded contract, there is a 

critical need for careful program planning. Program planning must 

provide for appropriate surveillance of the contractor's performance and 

adequate controls to ensure that projected funding will not impinge on 

the program office's ability to support, within anticipated 

appropriations, other equally important contract or grant programs.

    (7) An incrementally funded contract must contain precise 

requirements for progress reports to enable the project officer to 

effectively monitor the contract. The project officer should be required 

to prepare periodic performance evaluation reports to facilitate the 

program office's ultimate decision to allot additional funds under the 

contract.