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HHS Reference Tool for Contract Funding, Formation and Appropriations Law Compliance



Regulations and

Case Studies

Frequently Asked Questions


HHS Reference Tool Content

I.Basic Appropriations Law Concepts
 A.Anti-Deficiency Act
 B.Bona FideNeeds Rule
 C.Appropriation Types
 D.Continuing Resolution
II.Decision Factors
 A.No-Year Appropriation
 B.Bona FideNeeds Rule
 C.Acquiring Severable Services
  1.Annual Appropriation
   a.Contract period not more than one year
   b.Contract period more than one year
    -Incremental Funding
  2.Multiple-Year Appropriation
   a.Contract period will not extend beyond multiple-year appropriation's period of availability
   b.Contract period will extend beyond multiple-year appropriation's period of availability
    -Incremental Funding
 D.Acquiring Non-severable Services
  1. Funded in Full
    a.Entire Contract/Single Requirement
    b.Fully Funded Initial Requirement (Followed by Options)
  2.Multi-year Contracting
  3.Options After Initial Requirement
    a.Severable Services
    -Annual Appropriation
    -Multiple-Year Appropriation
    b.Non-severable Services
    -Fully Funded
    -Multi-Year Contract
 E.Acquiring both severable and non-severable services
  1.Single Definitive Contract
  2.Indefinite-Delivery/Indefinite-Quantity Contract
III.Case Studies
IV.Frequently Asked Questions

Acquiring Severable Services

Are the services severable?


Yes      No


Help Notes


Severable services means services provided on an on-going, as needed or recurring basis and that meet a need of the Government at the time they are delivered (refer to the examples listed below). When the need for a portion of recurring or continuing services arises in the fiscal year subsequent to the one in which the services were initially funded, that portion is severable and chargeable to appropriations available for obligation in the subsequent fiscal year.

Key Exception

A significant exception to this general rule was provided with the passage of the Federal Acquisition Streamlining Act (FASA) in 1994, providing agencies greater flexibility in their use of annual appropriations. This authority was implemented by FAR 32.703-3(b), Contracts crossing fiscal years. In essence, a contract, option or order for severable services funded from an annual appropriation may cover a period that begins in one fiscal year (FY) and ends in the next FY, provided that: (1) the requirement is a bona fide need at the point of contract action execution; and (2) the period funded by the contract action does not exceed twelve months. Funds made available for a fiscal year (i.e., annual appropriations) may be obligated for the total amount of a contract action entered into under this authority.


  • Animal holding services (i.e., daily care and feeding of laboratory animals)
  • Janitorial/custodial/facilities support services
  • Temporary help services
  • Information technology help-desk support
  • Off-the-shelf training services
  • Technical assistance on an as-needed basis
  • Administrative/program management support services (provided on-site in support of daily operations)