HHS Reference Tool for Contract Funding, Formation and Appropriations Law Compliance
Options — Type of Services
What type of services will be acquired using the planned option(s)?
Severable services are provided on an on-going, as needed or recurring basis and meet a need of the Government at the time they are delivered (e.g., information technology help-desk support). 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.
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.
A multi-year contract with two line items, covering: (1) a 5-year study, concluding in a final report documenting the research results; and (2) an option for the key research team members to present their findings at three HHS-sponsored meetings over the next 12 months (severable services) .
Non-severable services constitute a specific, entire job or single undertaking with a defined end-product that cannot feasibly be subdivided for separate performance. Accordingly, non-severable services must be financed entirely out of the appropriation current at the time of award, even though performance may extend into future fiscal years. Following that logic, contracts for non-severable services cannot be incrementally funded (see 71 Comp Gen 428 (1992) and GAO Decision B-317139, Matter of Financial Crimes Enforcement Network). The only means to award a contract for non-severable services without full funding up front is to use the multi-year contracting method per FAR Subpart 17.1.
The only means to award a contract for non-severable services without full funding up front is to use the multi-year contracting method per FAR Subpart 17.1.
A multi-year contract with two line items, covering: (1) a 5-year study, concluding in a final report documenting the research results; and (2) an option for a 3-year follow-up study of research participants, again concluding in a final report documenting study results (non-severable services).